Save Money Running a Business
Save money with GST/HST Returns
GST can be a significant cost for businesses, and many are not aware of the ways to reduce this cost. One way is to register for a GST account to Save Money. This allows businesses to charge 5% GST to customers and collect money from the customers and give it to the government.
GST can also be claimed back on purchases made by the business. This is called an input tax credit. Input tax credits can be claimed on most business expenses including office supplies, equipment, and professional services.
To claim an input tax credit, businesses must keep receipts for all GST-eligible purchases. When GST is filed, businesses can then claim the GST paid on these purchases as a credit. This effectively reduces the GST paid by the business and can save significant money over time.
An example would be if you paid $100 in GST when purchasing a $2000 laptop for your business, come the following tax season, your accountant can that $100 as a tax credit so long as you retained either a digital or hard copy of your receipt.
When should you Register for a GST Number?
You should register for a GST number after you hit the $30,000 mark in sales. GST registration is not mandatory for businesses with sales below this threshold, but it may still be beneficial to do so. This is because GST registration allows businesses to claim input tax credits, which can offset the cost of GST paid on business expenses.
If your business is GST/HST registered, you have to file GST/HST returns, even if you didn’t make any sales during the reporting period. The frequency of GST/HST filings (monthly, quarterly, or annually) is based on your GST/HST remittances.
You should register for a GST/HST number if:
– your business is incorporated federally or in a participating province
– your business is within the GST/HST registration threshold in your province
– you are a charity that issues GST/HST receipts
– you are a public service body that incurs GST/HST on expenses
If you have any questions about how to save money when running a business or GST/HST tax credits, call BBS Bookkeeping Services today!