The truth and lies about GST/ HST

GST pinata

Launching a small business can feel like swinging blindly at a big, colourful, juicy piñata: a hit or a miss, but if it’s a strike, you get all the yummies and toys inside, along with some lame confetti and papier-mâché filler.

The lackluster, more boring, of the bunch become the key steps and financial decisions to starting a new business. But, without careful planning, you might as well be that person with their eyes shut, hopelessly flailing their stick into open air.

One of the things you need to consider is whether or not you need to charge Goods & Services Tax (GST).

We hope our handy tips and our clarification of some common myths helps you move forward in your small business planning.

 What is GST?

  • GST is an input tax: Meaning that the amount that you PAY to others reduces the amount that you OWE.

Why would you register for GST before making sales of $30,000?

  • If you are starting your small business and incurring high start-up expenses. You can get a refund on the GST that you pay on those expenses.

  • Some potential clients might not want to do business with you if you don’t have a GST number.

Why would you hold off from registering?

  • Keep your paperwork simple for as long as possible. If you register you will need to hire a bookkeeper to make sure your returns are correct, filed properly and on time.

  • When you bill your clients your total will appear cheaper than a competitor who charges GST.

 It’s July and I’ve just made sales of $30,000. What do I do now?

  • By law you have 3 months AFTER you have made sales of $30,000 to register and start charging GST.

  • You must include your GST number on all your invoices.

  • You must keep all records of GST charged and paid for 7 years

Here are four common myths about Goods and Services Tax:

Myth: Every small business must register for GST.

Fact: Every small business that has made GROSS SALES of $30,000 in a calendar year must register.

Myth: I am registered for GST but my sales are less than $30,000 so I do not need to charge my customers the tax.

Fact: If you are registered, then you are obligated by law to charge all of your customers GST.

Myth: GST and HST are two different taxes.

Fact: In fact they are the same tax being paid to the same agency (Canada Revenue Agency). The only difference is that in BC we now charge GST of 5%; before we charged HST of 12%.

Myth: My Business number is different from my GST number.

Fact: Your GST number is your Business number (9 digits) with the ending RT0001.

Avoid CRA penalties

Income Tax Filing Vancouver

Unleash your inner beach diva mid tax season, and rejoice!

Whether you’re ripping the waves in Tofino, or lounging at home with a bird’s nest do, file you e-return whenever, wherever.

Our quick and easy electronic tax filing option is a great alternative for anyone who prefers hassle-free, no appointment necessary service.

April 30th filing deadline is approaching as quick as the Easter bunny. Save time and paper, and avoid CRA penalties.

And don’t let taxes stop you from quality time on the beach.

Fill out the form below, and request an e-return today!

If you know someone who needs help with their taxes, please forward this post to them. We always appreciate your referrals. 🙂

Request an e-return

 

Fix and flip: Three things you need to know about house-flipping in Vancouver

house flipping vancouver

I see a  beautiful, white 10-bedroom villa, with a long, spacious veranda that leads to a vineyard, overlooking a flowery hillside. The birds are playing in the field, chirping my favourite tune, with crops that are gently swaying in the warm summer breeze. Life is awesome. 

They say, “One person’s trash is another person’s treasure.”  When it comes to flipping houses, it comes down to this:

  1. Have a vision
  2. Be brave
  3. Sell for profit

What the flip?

It’s when you see that junky house or an apartment and envision something different in that space, be it new, shiny tile floors and a fresh coat of paint, or a complete and utter gutting of the space.

So you buy it, spice it up, and sell it for profit. Flipping easy, right?

Suddenly, that run-down house becomes a mansion and that dude refreshing himself with a cold beer in front of it turns into a swimming pool. At least in your imagination they do, for now…..

Here’s the bare bones of house/ apartment-flipping:

  1. Find cheap land/ apartment. Without a good deal, there will be no margin for profit once the renovations are complete and all the other fees are paid out.
  2. Don’t spend more than 40-50K. If you are flipping an apartment that is 500-800 square feet, you should not be spending more than 40-50K on the renovation before you sell or you won’t be able to sell it for a high enough price and you might lose money.
  3. Rent it, don’t sweat it. House-flipping is less popular in Vancouver than apartment-flipping. Developers and homeowners can usually make more money just buying and holding the land for 6-12 months or more while renting the house, and making a significant profit of the appreciation of the land.

Tip: Like anyone engaged in the intricate art of renoing, you will need a cool bookkeeper to manage your expenses, file your GST return and make sure your taxes are filed properly.

That’s where we come in.
We can definitely connect you with some kick-ass professionals in the industry, or just take on your books!
Happy house-flipping!