The GST Quick Method is available to smaller businesses and is easier, quicker and saves money as compared to the normal method of GST filing.
And since all GST registrants must file GST on either an annual, quarterly or monthly basis it can save a lot of time as well as money.
Effective for reporting periods beginning after 2012 certain businesses can elect to use the GST quick method if their annual gross revenues are under $400,000. This is an increase from the previous level of $200,000. Gross revenue includes both the revenue and the GST on your invoices.
Instead of sending in all of the GST you collect less the input tax credits you pay, you send in 2.6% of the first $30,000 of gross revenue and 3.6% of the gross revenue after that. You get to use these reduced rates in lieu of claiming ITC’s on expenditures. However, if you purchase a capital asset, like a vehicle or piece of equipment, you are still able to claim the ITC on that purchase.
Generally, the GST quick method calculation has saved many of our clients $1,000 or more each year under the previous threshold of $200,000 and the savings will likely increase to as much as $3,000 or more per year if your revenue is close to the new threshold amount. As well, the GST quick method, as the name implies, is quicker and easier to use than the general method in most cases.
Here is an example of the impact of switching to the quick method for an average small business:
The GST quick method has resulted in savings of $1,460 when compared to the general method.
If the actual expenses that have GST are less than $50,000 then the savings will be even more. However if the expenses with GST are more than $50,000 then the savings will be less. Either way, the savings can be substantial and are annual savings not just a one time amount.
Most service based companies and some businesses that purchase and resell goods are eligible to use the quick method.
If you’re not sure if you are registered for the GST quick method or the general method let us know and we’ll be happy to look into it for you. And we can easily facilitate the change to the quick method with the Canada Revenue Agency (CRA) if desired.
If you would like to speak to someone at KWB about the specific impact that switching to the GST quick method would have on your business please call us at 780-466-6204 or click here to send us an email and we will be happy to get back to you.
Thanks to David Wickenberg of KWB Chartered Accountants for providing this content.
Other Posts by David
CRA Tax Myths
Will CRA email me for information? Can I refuse to pay income taxes if I want to? Can I avoid paying GST? Do I have to pay taxes on lottery winnings? These myths are answered.
Many of our clients who have started to utilize wealth management services with our wealth management partners have seen their returns go up, risk go down and most are paying less in fees and commissions.
What is the Portal?
At KWB, we constantly strive to find new ways to improve the delivery of our services to you. In 2011, we launched a client portal that was admittedly a bit of a disappointment. It was hard to use and wouldn’t even work on many of your computers or with your software. That didn’t dissuade us from continuing to pursue a usable and beneficial portal, though. In 2012, we re-launched the portal after solving many of the shortcomings of the old portal. This new and improved portal will dramatically improve your experience.
Children's Arts and Fitness Tax Credits
Two separate tax credits now exist that are specifically focused on providing relief for families with children in various activities. And, with these credits in place the tax relief provided to parents is now better than ever.
The Candian Pension Plan (CPP)
The Canadian Pension Plan (CPP) rules are changing, and, unless you are currently collecting on your CPP and are over the age of 65, you need to pay attention.
The Value of a Unanimous Shareholders Agreement (USA)
The financial wealth of many individuals is represented by the shares of a privately-held corporation, and, as such, a shareholder agreement is an invaluable legal instrument when the corporation is being continued by other shareholders or family.
Life Insurance Creates an Estate Value
Life insurance has many applications and in this first of a 3 part series you will see how it creates an estate value when little to no value previously existed. To learn more, read on.
Converting Your Business into Cash with Life Insurance
In the second part of our life insurance series you will find out how to help your estate access the wealth represented by your shares in your business and your shareholder loan through the proper use of insurance.
Is it too late to reduce your 2012 taxes and optimize your investments?
Is it too late to reduce your 2012 taxes and optimize your investments? Perhaps not—if you contact KWB right away!
2013 Tax Filing Deadlines
Well, it looks like spring time may finally be here and tax time is certainly upon us as well. Find out what the important personal tax deadlines are.
CRA's Cash Receipts Window
Canada Revenue Agency (CRA) has announced that they are closing their cash receipts window effective September 30, 2013. Find out how this might affect you.
Are RRSP’s the right investment choice?
RRSPs are one of the few last minute and flexible deductions available to people with employment income from a T4.
However, if you are an owner of the business and have some control over your salary, you should consider some of the other alternatives first. Even if you can’t control your own salary you should
We launched a new website this past month and it's full of new content such as:
• Videos on numerous tax and business subjects
• Dozens of blog postings on topics that we've written over the last few years
• Content on all sorts of subjects customized to your specific needs
• Testimonials from many
KWB has moved
After 18 years in our offices at the Edmonton Sun building, we have embarked on a new path.
We moved on December 1st, 2014 and our new home is now at 9771–54th Avenue, T6E 5J4.
Our move went well and the place is looking great. There are a few loose ends that need to be
Merry Christmas from KWB!
All of us at KWB hope you enjoy yourself this holiday season. If you need to reach us, we are open regular business hours of 8:00-4:30 on the 22nd and 23rd and then closed from December 24th to December 28th.
The office is open again on December 29th and we are in all
Extended presence in the US and loss of benefits
Under the Canadian income tax system, an individual's liability for income tax is based on his or her status as a resident or a non-resident of Canada.
An individual who is resident in Canada during a tax year is subject to Canadian income tax on his or her worldwide income from all sources. Generally, a
CRA Direct Deposit
You may have been asked to provide your bank account information to CRA so that any refunds owed to you can be directly deposited into your account.
However, if you are concerned that CRA now has access to your account and could access your funds you can stop worrying. CRA has stated that if money
Structuring the legal ownership of your home
What's the best structure to have for the legal title of your home?
The answer is...it depends.
Are you asking for tax planning purposes or for estate planning purposes?
Often you may be advised that it's important for you to have the title of your home shared with somebody else so that if something
Online tools from the CRA and Service Canada
Here are some great tools on the CRA website to help in day to day activities that I personally use.
1) Payroll Deduction Online Calculator
Use the Payroll Deductions Online Calculator (PDOC) to calculate federal, provincial (except for Quebec), and territorial payroll deductions. It will confirm or allow you to calculate the deductions you include
Halloween at KWB
This past Friday, October 30th, the staff at KWB once again celebrated Halloween at the office.
A costume party and office decorating contest were the highlights and although we skipped the pumpkin carving this year there's a good chance it will be back in 2016.
Winner of the best costume with a great make up
Save Money with a Health Plan
Save Money with a Health Plan
How can you save $100’s and maybe $1,000’s in taxes in one simple step? Are you an employee of your own company and do you have significant medical expenses each year of $2,000 or more not covered by a health plan? Then creating a “Private Health Services Plan” (PHSP) as soon as possible could save you big dollars.
If charitable giving is something that you are interested in and you want to see the tax benefits obtained recently by one of our clients, read on for more information.
If you are moving and are the owner of your own business you should consider deducting the expenses in your company rather than on your personal tax return.
If you do not have that option, then the tax rules provide that if you have moved to be at least 40 km closer to your place
Spousal Loan - Tax Savings Opportunity
If you are in a much higher income tax bracket then your spouse and have investments outside of an RRSP or TFSA then a spousal loan could reduce your taxes.
Money that is earned directly by you through employment or investing is considered yours and can’t just be given to your spouse to invest.
Here are some common myths about our personal tax system:
Myth: The CRA completely agrees with the information you submitted in your return if it sends you back a Notice of Assessment that agrees to what you filed.
A Notice of Assessment is just the result of a quick assessment that will have fixed any
Gross Negligence Penalty
As Canadians get busy filing their taxes, the Canada Revenue Agency (CRA) reminds everyone to be cautious of fraudulent tax filing. The CRA will audit, reassess and can apply a gross negligence penalty equal to 50% of the additional tax payable if it can show that a taxpayer knowingly, or under circumstances amounting to gross
Protecting Treasured Family Assets with Life Insurance
Do you want to protect the value of your estate for your heirs and preserve those cherished family properties and other assets? If so, read on for more info.
Personal Services Business (PSB)
In the past, it was OK and even advisable to conduct business through an incorporated company even if PSB rules applied.
With recent changes to the rules, though, this is no longer true. So what are these changes, and what do they mean to you?
CCH Profit Driver
At KWB we use software called CCH Profit Driver that can turn historical financial data into tactical plans.
For example we can create scenarios that would help you optimize operational efficiencies, improve cash flow and demonstrate possible outcomes. CCH Profit Driver is really a "what if ..." planning tool. How would you like to know
How to Avoid a CRA Audit
If you want to figure out how to avoid a CRA audit there are a number of things you should know.
Probably one of your worst nightmares is the dreaded audit letter from the Canada Revenue Agency (CRA) informing you that you're going to be audited and CRA will send out approximately 30,000 such
The Glass Cliff
KWB has sponsored The Glass Cliff conversation at the Winspear on September 27th from 7:00-8:30 with a reception to follow.
The panel includes Kirstine Stewart, the Rt. Hon. Kim Campbell, Eveline Charles and Dr. Shawna Pandya.
The Glass Cliff event - 27-9-17
If you are interested in attending we have a few remaining tickets and would
Free Quickbooks Online Seminars
KWB is hosting free quickbooks online seminars for our clients to learn more about the benefits of QBO and the apps that it supports.
Upcoming seminars are:
Wednesday October 4th at 11:30 (lunch provided)
Thursday October 19th at 8:30 (coffee and pastries provided)
Friday November 3rd at 11:30 (lunch provided)
Tuesday November 21st at 8:30 (coffee
Year End Tax Tips
Review our year end tax tips to discover a number of perfectly valid actions you may still be able to take before the end of the year to cut your taxes and to optimize your wealth management planning.
As tax planning specialists, we at KWB can help you decide exactly what to do, when to
Proposals from the Department of Finance on July 18, 2017 included changes to the taxation of split income.
The most common form of split income is income from a dividend from a related entity that is not excluded from being categorized as such.
Prior to 2018, shareholders of privately held companies over the age of
Borrowing Best Practices
You may not always understand what your banker is seeing or what they are asking for, but the good news is that both your banker and you want to see the business succeed. Here is more info on the 9 simple things that will help you become a more successful borrower.
Having good bookkeeping will enable you to make good decisions based on accurate financial information provided to you on a timely basis.
KWB Chartered Accountants offers bookkeeping and similar services. With timely and accurate information we can help you address your issues and make better decisions as a result.
These are definitely tough times, and
Controller and CFO Services
Do you think you may need Controller or CFO services? Are you looking for information to help you make good decisions? Are you unsure of what's happening financially in your business?
You need timely, accurate and complete financial information and the people who can figure out what it all means in order to survive in today's economy
2017 Tax Filing Deadline and KWB office hours
We would like to remind you that for the majority of Canadians, your personal income tax returns should be filed by April 30.
It is our desire and intention to complete everyone’s returns by the April 30th deadline.
To help with this we are open extended hours until 6:00 PM during the week starting April