5 Reasons to Change Your GST/HST/QST Reporting Period and How to Do It
When starting a business the selection of the GST/HST or QST reporting period i.e. how often to file your sales tax returns is often based on new business considerations. Many new business owners are quite enthusiastic and/or orderly and therefore would prefer to file their reports and pay the balance owing on a more regular basis. Conversely owners might be concentrating on the other aspects of running their business and do not want to be bothered with the administrative hassle of regular monthly or quarterly reporting. In this case, you might select the annual reporting option to make the year end reporting requirements as simple as possible. As time passes and your business evolves, you might realize that the option that you initially selected may no longer be the most optimal.
Why a Separate Bank Account is Essential for Your Small Business
If you are self employed or a small business owner taking care of your own accounting and business finances, you have probably discovered that this can be time consuming and occasionally frustrating. It can sometimes be difficult to know if you are doing things correctly. Consequently, you procrastinate, which makes things worse at year end or tax time. To combat the problem it is important to have tools in place to facilitate the process and make it less painful, which could include accounting software and/or a bookkeeper as well as a good organization system for your documents, whether you have a paperless office or a manual filing system. Another very simple measure that you can take is to have a separate bank and credit card account for your business.
Tax Deductions vs Tax Credits and 5 Tax Deductions to Help Reduce Your Tax Bill
Most taxpayers use the terms tax deduction and tax credit interchangeably. Since they are not accountants, this is perfectly fine unless you are particular about precision and strive for a greater understanding of tax. And while there a numerous technicalities and jargon in tax that are better left to tax professionals, this particular distinction is fairly straightforward , can useful to understand and might even save you some tax.
So, what is the difference? A tax deduction is a reduction of your net income on which your taxes payable are based, while a tax credit is a direct reduction of your taxes payable. These might sound very similar, but their impact on how much tax you pay is different. Since there are different tax brackets, a tax deduction results in a reduction of your taxes payable effectively at the highest tax bracket to which your income applies, while a tax credit (for simplicity we are only talking about the federal portion and not provincial) will only reduce your taxes by 15%, which corresponds to the lowest tax bracket. While this can get significantly more complicated, suffice it to say, if your income exceeds approximately $50k, tax deductions have a higher value i.e. they reduce your taxes by a greater amount than a tax credit since part of the $50k will be taxed based on a higher tax bracket.
9 Tips for Building a Sales Forecast
Having a dynamic, regularly updated sales forecast can be essential to the success of a small business. By forecasting your sales revenue you are helping to control for its unpredictability, an inherent risk in any business venture, and prepare for the decisions that are essential to your business profitability. Whether your sales are increasing, decreasing or static, it is always better when decisions are made proactively rather than reactively.
Building your small business sales forecast can be as simple as you want it to be and does not require an accounting degree , particularly when your business is in the early and/or startup stages. Below are some tips to help you create your sales forecast:
A Guide To Payroll Deductions for Employees and Employers
So, if you have ever been an employee in Canada, you have received a paycheque. The salary or hourly rate is decided upon by you and your employer. Your employer is then responsible for calculating the deductions required by Revenue Canada (and Revenue Quebec for QC based employees) and remitting them to the revenue agencies. They must also complete the T4s (and RL1s in Quebec) for the full year and give them to the employees by February 28th of the year following the year of employment (regardless of termination date during the year) and ensure that they give them to you so that you can complete your tax returns.