I have been operating a partnership for 4 years that derives 100% of its income from an Asian country. Because as an UberEats delivery person you do not collect GST/HST from the customers, you do not automatically have to register for the GST/HST (unlike Uber ride-sharing drivers, who must collect GST/HST from customers). You can also allow a third party to pay your employer health tax on your behalf. If you are not in business, you already have a social security number, you don't need any other tax ID number. Hey I operate a business performing physiotherapy and rehab and functional assessments is this considered medical or do I need to register for a number ? You know – one can start charging the HST before registering the actual account, up to 30 days in advance. I will be paid weekly and no taxes will be taken off. I’m not sure what I need to do since I have never collected any GST from that one client and stopped doing freelance work. Hi, I recently started working for my cousin and his construction job. Can I not treat both income sources as one business when doing taxes? The only exception would be if you are offering music lessons to children. I was going to register prior so that by the time I have to collect it will not happen to me. Your son doesn’t have to register for the GST/HST. So don’t despair! Remember that you will have to continue collecting/filing/remitting GST/HST for as long as you remain registered, regardless of how much or how little revenue you earn. The very short, general answer is that you should never be ‘out of pocket’ to remit HST. You do not get to decide whether to claim your marital status on our tax return. Note: We cannot assist you with finding your tax file number – contact the Australian Tax Office. Now, I will need to register for HST but if i am NOT self-employed after all then what happens? If the seller is charging you GST/HST, you definitely want to register for the GST/HST before making the purchase, otherwise you won’t be entitled to claim any of the GST/HST back. The gross income for my other business, a furniture-assembly business was $9,000. Am I not allowed to get the gst back in my expenses? I can guarantee I won’t be making $30000 because it’s only a summer and possibly a casual job. It is free to apply for a TFN. Once you cross that threshold, it is your responsibility to register voluntarily. Sunny Widerman has been preparing income tax returns for entrepreneurial Canadians and their friends since 2002. I will be using a rental vehicle and my own gas. First, regarding your question about registering for the GST/HST on your corporation. Thank you! If you only offer non-taxable services, you can’t register for the GST/HST. I have always been a permanent, full-time employee but last year while between jobs during Feb – July 2019, I took a marketing consulting job for 4 months. Why does the CRA website say the limit is $30,000 per quarter? I’m thinking about opening an Etsy shop to sell handmade crafts. You can’t legally charge GST/HST immediately because you can’t charge it without registering for a GST/HST number. Both the income and the expenses should be entered on form T2125 Statement of Business and Professional Activities as part of your income tax return. I don’t think you need to also incorporate in the US, but I’m not a US tax specialist. If you’re self-employed, freelance, or run any kind of business in Canada, you’ve probably heard that you have to register for the HST/GST once you make more than $30,000. Now, here is my situation: I work as a “self contractor” for a company ( at least this is what it is written on the contract). Second, regarding whether your sole proprietor income must be taken into account when determining your corporation’s status, the answer is no. Moreover, the only data regarding your self-employment income that CRA receives when you efile your return is the net profit/(loss) from all your self-employment so they won’t even see how many T2125 forms there are unless they show up at your door and ask to see them (highly unlikely!). There are two situations in which you can elect to file a Canadian income tax return for income from which Part XIII tax was deducted: If you elect to file a Canadian income tax return, you may be able to claim a refund for part or all of the Part XIII tax deducted. For example, say you billed $1000 in GST/HST in the period, while spending $400 in GST/HST in the same period. The government won’t send you a notice or a warning – not right away, at least. Is this correct? File an Extension Don't take that completed tax return and your debt at face value, at least not if you prepared your return yourself. Hi Sunny, I’m so happy to have come across your post. Once you've registered to pay the employer health tax, you can file and pay your tax returns online using eTaxBC. Remember, though: If you are collecting and remitting GST/HST, you should also claim back any GST/HST you spend, for example on the business portion of your gas and maintenance costs. However, different rules may apply if you offer some services that are medical and others that are not. Hopefully not. It doesn’t make any difference, tax-wise — they’re just optimized slightly differently for entering certain kinds of income-related information — and not in any way that will affect Mark’s tax return. If you earn more than $30,000 in 12 months, you must register for the GST/HST. He won’t be anywhere near the $30K mark, but would it benefit him to have one to claim gas, repairs, insurance, registration and phone/data usage? 1/ Incorporate first The nature of the work you do isn’t important. Here is a list that you can check to see whether your services qualify: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/lines-330-331-eligible-medical-expenses-you-claim-on-your-tax-return/authorized-medical-practitioners-purposes-medical-expense-tax-credit.html. In the case of your Quebec clients, that’s 5%. A sole proprietor is essentially considered to be one with the business, so even if they change their name, or spend part of their time subcontracting for someone else and the rest of the time billing clients directly, it’s all considered one business and all the income contributes to the $30,000 limit. Depending on what your business is, if your expenses are made in Canada and there are a lot of them, you could be entitled to a tidy sum. Keep up the amazing work, it will get you far! The good news is, you’re probably going to end up getting refunds (free money!). Even once you register, you do not charge HST to non-Canadian payers. And then you get to claim back any GST/HST on expenses that you paid out after that registration date. Even though I was not earning enough, will the government be looking for the revenue from me for that time period as I had a HST number at that time? When filing my GST/HST, I treat it all as one business (combine the incomes and expenses) especially since they are so closely related. Obviously the situation you’re describing does point fairly strongly toward you being an employee from CRA’s perspective. In this anticipation, two weeks ago, I charged my client the HST on a small repair job. I don’t expect to make over 30000 for this year but I am wondering if it is worth registering for HST number anyway because of expenses? I am planning to call CRA and get an HST number directly under my name. (Slips aren’t issued until early the next year, but suffice it to say that if they’re withholding tax, EI and/or CPP, you’re going to get a T4; otherwise, you’ll get a T4A or nothing.). The Canadian income tax year is from January 1 to December 31. Please note: This application applies to Australian residents only. It’s important that you inform the payer, because — even if they don’t mind having paid GST/HST — they may be planning to make a claim to get it back from the government, and they’re not allowed to if it’s been paid to a non-registrant. But I am worried because the CRA will see the $37,000 amount. As in a few years earlier? Once registration is cancelled (or during the period during which it is suspended) you neither collect, file, nor remit GST/HST. Am I understanding this all wrong? Do I just file a nil-return or can I get a refund? What do I do ( I.e. Anyways my business will be under 30k. Or some other kind of service (which would mean you do have to register)? How would you file this? It is a 50%-50% partnership. etc.) Here’s my question. 70% If you registered less than 90 days ago, you can just call them and say you registered in error and basically delete your account. Rather than explain it here, I’ll write a blog post about it at a later date and post a link here. There’s no charge for this, so don’t hesitate to get in touch. Another question is, I’ve seen people earn over $30,000 professional income (doctors for example), they claim all their expenses on T2125 and they were not required to file a HST return. Technically they could go back and demand that you collect and remit retroactively. Hi Will. Before you register, you can’t collect GST/HST. However, if you want to claim back some GST/HST on the cost of the car then of course you must register. Tell the person who answers that you have a question about determining the small supplier threshold when you have both a partnership and a sole proprietorship. No, you don’t have to pay the government GST/HST on invoices that preceded your GST/HST registration. You can reach CRA’s business and HST services at 1-800-959-5525 (press the * key to speak to an agent). If the rental vehicle is used only for business (deliveries), that should be an easy calculation – just add up all your receipts. However I went back to working full time for the steady paycheck with somebody else. Hi Mackenzie. Hi I’m in just a start up small business so I’m new to this not registering Gst/hst if not making above 30000. Once you hit the $30,000 threshold, you register, inform whoever pays you, and from that point forward they must pay you your commission PLUS GST/HST. I have been remitting now for three quarters but I have not yet reached $30,000 in any 12 month period. So even though you won’t hit the $30,000 in 2018, if you’re registered you’ll still have to go through the motions. Or do I have to pay the government %13 hst since I live in Ontario? I have no opportunity to charge HST back as I only have 1 company that I work for. After one full year of registration you can call CRA and request to cancel your registration. I have been searching high and low on whether online courses will need to collect GST/PST in Vancouver… does it matter if I run an online class for children or adults? By the way, if you’re making Etsy sales outside of Canada, you don’t charge GST/HST on those foreign sales. Your boss pays it to the business owner (you, if you’re registered and have a number) and the business owner (again, you) is responsible for remitting it back to the government. I’m crossing my fingers that you set aside all the HST you were paid, because after you register you’ll have to file a GST/HST return covering the period from the date of registration to December 31, 2017 and remit all the HST you collected, minus any HST you’re claiming back on expenses. (Technically you do charge American payers GST/HST, but you charge it at 0% — there’s a legal difference between ‘not charging’ and ‘charging 0%’, but that’s a topic for another day. As for the older number, you’d need to check in with CRA to see if they’re still waiting for anything regarding that account. Do you have employees? You are amazing… like really. For 2020, the terrible year: you collect GST/HST on any fees you charge to a Canadian person or entity, except for music lessons. You don’t have to figure out a 12-month period after you reach 30k. That would be more than if I kept it at 30,000. The most correct thing to do is to back-register for the GST/HST (your date of registration should be the day on which you billed the first dollar over $30k), then go back to the company that was paying you consulting fees and bill them retroactively for the GST/HST, amounts you will then remit to the government. Hi Cristel, thanks for your comment. Thank you very much for writing this article. Hi Rosalyn. In practice they never do. Unless you, personally, are registered to collect GST/HST, you do not have to remit any GST/HST to the government. If it’s time (or past time) for you to register for the GST/HST, the good news is that it’s easy to do. Hire someone once, consider it an investment in your own education, and then you can take the job back next year. Hello Sunny. • Income that isn’t from self-employment (i.e., salary from a job, investment income, or social support); • Grants that do not require you to create a work and give it back to the grantor; • Revenue from sales that are ‘exempt supplies,’ i.e not subject to GST/HST, such as groceries, financial services, or music lessons. What you need to know about filing your personal income tax and benefit return. He can still deduct allowable business expenses such as a portion of his vehicle expenses. | am looking into a job doing small parcel deliveries. Yes, small supplier rules (i.e., the fact that you are not obliged to register for the GST/HST until/unless your revenue exceeds $30,000 in 12 months) are the same for a sole proprietor and a corporation. Doctors don’t have to register because medical services are exempt from GST/HST. That said, there can be a conflict between how the payer sees you (e.g., as a self-employed contractor) and how CRA thinks you should be seen (e.g., as an employee). You don’t have to register or collect GST/HST unless or until you register for a number. As for rent, commercial rent is subject to GST/HST but residential rent is exempt. CRA Program Account numbers. Clearly an endeavor that earns $30,000 in 90 days is earning faster than a company that takes 10 months to earn the same amount, so the process is considered more urgent and the timelines are tighter. I never reached a 30K threshold and don’t have an HST account. You remit $2,900 and use the extra $1000 to enjoy your life. Should I get a business number or not necessary? But be aware: while you can file a GST/HST return and get a refund, doing it for several years in a row may trigger scrutiny from the Canada Revenue Agency (CRA). In situations like this they often create a document called a memorandum outlining their general perspective on the issue, that serves as guidance to taxpayers and agents alike. I have been working in a clinic since last month, but am also going to work through my own private practice next month (sole-proprietorship) . You can reach them at 1-800-959-8287. Highway Use Tax (HUT) Web File is the easiest and fastest way to file a highway use tax return and make a payment. There is no connection between having GST/HST registration, and being allowed to take business deductions. GST/HST isn’t something you (as a business owner) pay; it’s something you collect from your customers, and then remit to the government. This is not tuition nor school affiliated courses. So it’s your call as to whether the trade-off is worth it. However, you will have to request that they back-date the registration to whenever it was that you first started ‘collecting’ HST (that is, when your employer started paying it to you). That’s why the profit from your business is reported as part of your personal income tax return. Hi Candace. Could be worth it! In order to see if I have to register for the GST/HST, I need to check my revenue from last August to today and see if it exceeds 30k. When it’s time to get serious about your taxes and your life, it’s time to move up to the next level of tax preparation with an experienced tax professional at Personal Tax Advisors. The company has provided me with the required laptop and headset to perform the job in question. I don’t know your exact situation, so I can’t be more specific than that. After making the purchase you would file a GST/HST return to claim back the GST/HST you spent. Not sure how to complete form T2125 Statement of Business and Professional Activites? You can learn more about Import-Export accounts from CRA here. So far so good. The exception would be if you earned more than $30,000/year in self-employment, which you say you are far from doing. I’m new to hear about HST register. What’s at issue is that certain financial services (e.g., bank fees) are considered to be exempt from the GST/HST, and therefore a person/business offering only financial services doesn’t have to register. Or is all my income counted via 1 HST number? If your services are considered medical, you don’t have to register for or collect GST/HST. The commercial property is made up of store front 30% and with three separate residential apartments. As most people who are self-employed, freelance, or running a business in Canada, there is an income limit below which you don’t have to be registered for the GST/HST. Her friendly, non-judgemental approach to tax services and advice and lively public speaking style have made her a favourite among audiences and clients alike. Personal Tax Advisors began in 2005 providing Canadian income tax preparation services. Once you register — either because you’ve crossed the $30,000 threshold and have to, or because you choose to — you have to collect it from your clients and start filing GST/HST returns. LOVE your advice here and some of the replies are close to my situation. Then, one option is that you can go back to your payer and re-invoice them with HST added (sometimes a payer is willing to pay the HST retroactively, provided they haven’t closed their books for the prior year. The following information will help you decide whether your business needs an EIN. Check in with the IRS rules. No. Since this is a separate (and very small) business, am I required to charge HST on these items? Could you clarify how you get refunded and what exactly you are getting refunded for. They’re odd over there. So the question is, are you providing financial services? Best of luck with your new business ventures! As for PST (provincial sales tax), each province determines the rules differently so it is best to get advice from your province’s Ministry of Finance. Hi Lizzy. The GST/HST you can claim back is any GST/HST you spend on your business (e.g., commercial rent, office supplies) but NOT the GST/HST associated with expenses that relate to your tax exempt services. Pay and the internet automatically considered insurable ( without a special agreement ) is your and... You decide whether your services are not in business, a furniture-assembly business was 28,000. Returns through fax Agency ( CRA ) website for more information, see information Circular IC77-16R4, income... Person from you making over 30,000 it already includes GST/HST in 2017 complete... 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