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about e-ccounting
Our mission is to educate our clients
and students
by offering free tips. These are guidelines to assist
with some of your everyday questions.
These tips are not complete answers to complex
questions. We therefore recommend, when in doubt,
contact the professionals or government agency.
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more....
Sandy's Question Corner
Do you
have an
accounting question? Send it to us at
accountrain
.
accountrain@magma.ca
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Welcome to e-ccounting, a monthly
newsletter focusing on accounting tips and solutions.
accountrain is pleased to offer these
resources in response to the needs and requests of
our clients, students and readers.
We are often asked the same questions over and
over.
e-ccounting will address
these
popular questions. It is our objective to gather
information and provide easy access for your current
and future needs.
Back issues will be available on our website for easy
access 24 / 7.
Please forward this to anyone you feel may benefit
from some free accounting tips. They'll
be glad you did.
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| Business Scenario - this issue - GST |
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One of the most common questions we're asked by
new
clients and at networking events is - If and when
should I register for a GST number?
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| Answer |
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The Canada Revenue Agency's (CRA) answer is as
soon as the company has reached $30,000 in sales
in a given year, you must apply for a GST number
(assuming your industry is not GST exempt).
It is not always straight forward who is and isn't GST
exempt, therefore contact CRA for clarification on your
specific industry. If you are still unsure, do not
hesitate to call and speak with another agent.
Once you've received your number, you have it. In
other words, if the sales are less than $30,000 the
following year, it doesn't matter, you are still
responsible to charge and submit the GST on your
sales.
But, remember you receive a rebate on ALL the GST
you paid on any business-related purchases. In
otherwords, you end up paying the net of the two (the
diffference between the GST collected on your sales,
less the GST you paid on your purchases.)
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| Accounting Tip |
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Why wait?
If you're running a business without a GST number,
you are advertising that your sales are less than
$30,000, in otherwords, you are running a very small
business. Is this the image you want to project?
It is especially to your advantage if you're initial set up
costs are high as you will be eligible to claim the GST
you paid on all your purchases.
Remember your clients are already use to paying GST
so they won't mind and if they have a GST number,
they will get to claim it back anyway.
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| Did You Know ? |
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You can obtain a GST number by phone, it takes 5
minutes, the number is 1-800-959-5525.
The 9 digit GST number is the same as your business
number with RT at the end. (Payroll or source
deductions is the same number with RP at the end,
and Income Tax with RC and the end.)
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For more Did You Knows? |
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| Definition |
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CRA - Canada Revenue Agency
The Canadian Federal government department has
gone through several name changes in the past few
years, including CCRA - Canada Customs Revenue
Agency and the Receiver General. When making
cheques payable to GST (and other remittances) any
of these names are accepted.
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For more definitions ... |
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| Sandy's recommendations |
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Obtain a GST number as soon as you set up your
business.
Also, understand the bookkeeping for recording
both GSTon Sales and Purchases. Learning to
maintain
your accounting records from the beginning will
ensure this aspect of the business is running
smoothly.
Realize there is a short cut method, but investigate the
advantages of both before deciding how to account for
your GST sales and purchases.
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| Pass It On ! |
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Please forward this to anyone you feel may benefit
from some free accounting tips. They'll
be glad you did.
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