Entrepreneurship & Small Business

Taxation - answering any questions here

  • Last Updated:
  • Nov 20th, 2018 9:51 am
Newbie
Sep 15, 2018
9 posts
PhilipK796978 wrote:
Oct 11th, 2018 1:35 pm
Thanks. ok,
1. client can claim ITC in the current return, no need to adjust previous filed return

so, I guess you will need to adjust your return to include the 8%, $96 for 2016, 2017

the best and the most clearest way is to send your client a new invoice to charge HST for the 2016, 2017 invoice, for the additional $96

note that CRA will charge you interest for the $96

I hope I helped. thanks alot
Great thank you, but can i consider the first 60% as deposit and charge the full hst on the final invoice?

Also adjust the gst for me for both 2016 and 2017.

Thank you.
[OP]
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Oct 30, 2017
47 posts
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Ottawa, Ontario
loudyca wrote:
Oct 11th, 2018 2:14 pm
Great thank you, but can i consider the first 60% as deposit and charge the full hst on the final invoice?

Also adjust the gst for me for both 2016 and 2017.

Thank you.
that works if your invoice said so in 2016, 2017. if you only issue inovice in the final amount and show the full amount of HST. that way, you don't even need to amend your 2016, 2017 HST return.
thank you very much
Philip Kwok, CPA, CGA
Newbie
Sep 15, 2018
9 posts
PhilipK796978 wrote:
Oct 11th, 2018 2:17 pm
that works if your invoice said so in 2016, 2017. if you only issue inovice in the final amount and show the full amount of HST. that way, you don't even need to amend your 2016, 2017 HST return.
Oh ok that Is perfect, but do i need to adjust the gst paid already for 2016 and 2017 as Amandad correction with cra.

How I can fix that?
Thanks
[OP]
Newbie
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Oct 30, 2017
47 posts
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Ottawa, Ontario
loudyca wrote:
Oct 11th, 2018 2:28 pm
Oh ok that Is perfect, but do i need to adjust the gst paid already for 2016 and 2017 as Amandad correction with cra.

How I can fix that?
Thanks
you can do that, the end result must equal to the total HST charge, thats it.
thank you very much
Philip Kwok, CPA, CGA
Jr. Member
Oct 6, 2015
101 posts
44 upvotes
Toronto, ON
What is the proper way to prove Business Interest Charges (as an expense) if I am borrowing money from the same source for both business and person use? For example, the bank statement will only have 1 interest charge, but it is part personal and part business, right?

Thanks
[OP]
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Oct 30, 2017
47 posts
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Ottawa, Ontario
xxgosokxx wrote:
Oct 12th, 2018 8:03 am
What is the proper way to prove Business Interest Charges (as an expense) if I am borrowing money from the same source for both business and person use? For example, the bank statement will only have 1 interest charge, but it is part personal and part business, right?

Thanks
you will need to track the amount borrowed for business/personal. for example, if you borrowed 1000 for business and 2000 for personal, and interest is 10%,
the interest allowed to deduct for business will be $100.

thanks
thank you very much
Philip Kwok, CPA, CGA
[OP]
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Oct 30, 2017
47 posts
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Ottawa, Ontario
Hi, this is Philip, answering all taxation related questions. thank you
thank you very much
Philip Kwok, CPA, CGA
Newbie
May 26, 2018
34 posts
2 upvotes
Hi Phillp,

I have a corporation in NB and I have following questions-

1. I have an online business and my payments are collected by a payment gateway in US and all my clients see payment gateway's name on their invoice. The payment gateway send all funds to us. Are we required to collect HST from these sales even though we are not collecting payment directly?

2. This payment gateway sends us the funds once we reach a limit of $10k, when doing book keeping, do I make entry for each sales or just one entry $10k.

Thanks in Advance.
[OP]
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Oct 30, 2017
47 posts
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Ottawa, Ontario
Nbrocks wrote:
Oct 22nd, 2018 4:52 pm
Hi Phillp,

I have a corporation in NB and I have following questions-

1. I have an online business and my payments are collected by a payment gateway in US and all my clients see payment gateway's name on their invoice. The payment gateway send all funds to us. Are we required to collect HST from these sales even though we are not collecting payment directly?

2. This payment gateway sends us the funds once we reach a limit of $10k, when doing book keeping, do I make entry for each sales or just one entry $10k.

Thanks in Advance.
Hi Nbrocks
rather you charge HST or not, is depending on where is your client location, if the client is located in Canada, sale tax apply, if they are oversea, then no. gateway is only a media that collect for you, not your client.

you should record sales based on client, not based on when you receive funds. therefore, when you received an order, you should record sales/ and receivable, then when gateway pays you, you can reverse the receivable and record the $$ deposit.
thank you very much
Philip Kwok, CPA, CGA
[OP]
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Oct 30, 2017
47 posts
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Ottawa, Ontario
Nbrocks wrote:
Oct 23rd, 2018 7:32 am
Hi Phillips,

Thank you for replying. Here is the link to my payment gateway- https://docs.fastspring.com/getting-sta ... -sales-tax

According to them they will not charge tax to Canadian citizens and we should not make entry of each sales since they are a reseller. Let me know your views.
ok, if your customer is gateway, and they are located outside of Canada, then you do not have to charge sales tax.
thank you very much
Philip Kwok, CPA, CGA
Newbie
May 26, 2018
34 posts
2 upvotes
Hi Phillip,

Thank you. Since I am new in Canada, your replies are very helpful to me Smiling Face With Open Mouth. Please read my questions below-

1. I read that in Canada you do not have to register a business name for sole proprietorship. So, if I have a website called abc.com from which I sell software. Can I just keep this business on my name or do I have register this sole properitorship as abc software.

If In future, I start more websites, for example xyz.com then do I have to register each business? What's the best way to do this?

2. How do spousal credits work? Lets say I am a sole proprietor who had a profit 25000. My spouse, has also helps me in this business but in order keep taxation simple instead of making a partnership we opt for sole proprietorship. Since my spouse had no income during whole year, what would be my tax liability at the end.

According to online calculators, I will pay-

Federal tax $ 1,578
Provincial tax $ 1,305
CPP/EI premiums $ 1,479
Total tax $ 4,361

Thanks
[OP]
Newbie
User avatar
Oct 30, 2017
47 posts
13 upvotes
Ottawa, Ontario
Nbrocks wrote:
Oct 24th, 2018 3:48 pm
Hi Phillip,

Thank you. Since I am new in Canada, your replies are very helpful to me Smiling Face With Open Mouth. Please read my questions below-

1. I read that in Canada you do not have to register a business name for sole proprietorship. So, if I have a website called abc.com from which I sell software. Can I just keep this business on my name or do I have register this sole properitorship as abc software.

If In future, I start more websites, for example xyz.com then do I have to register each business? What's the best way to do this?

2. How do spousal credits work? Lets say I am a sole proprietor who had a profit 25000. My spouse, has also helps me in this business but in order keep taxation simple instead of making a partnership we opt for sole proprietorship. Since my spouse had no income during whole year, what would be my tax liability at the end.

According to online calculators, I will pay-

Federal tax $ 1,578
Provincial tax $ 1,305
CPP/EI premiums $ 1,479
Total tax $ 4,361

Thanks
fOR HST, if you are individual, you registry under your personal name, unless you have a corporation, otherwise, it will go under your name. therefore, doesn't matter many line of product you have, or how many website you have, it will all go to yourself.

for spousal credit, if wife has no income, her credit goes to you when you prepare the personal tax return. the credit will go against the tax payable. i am not sure about your calculated amount, haven't calculated myself.
thank you very much
Philip Kwok, CPA, CGA
[OP]
Newbie
User avatar
Oct 30, 2017
47 posts
13 upvotes
Ottawa, Ontario
PhilipK796978 wrote:
Oct 24th, 2018 4:05 pm
fOR HST, if you are individual, you registry under your personal name, unless you have a corporation, otherwise, it will go under your name. therefore, doesn't matter many line of product you have, or how many website you have, it will all go to yourself.

for spousal credit, if wife has no income, her credit goes to you when you prepare the personal tax return. the credit will go against the tax payable. i am not sure about your calculated amount, haven't calculated myself.
Thank you very much.
if you have any other questions, please let me know and I will try to help.
thank you very much
Philip Kwok, CPA, CGA

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