How to File Your Quarterly Sales Tax: A Comprehensive Guide

Filing your quarterly GST/HST sales tax can be a daunting task, especially for new business owners. While personal and business income taxes are typically filed annually, sales taxes like GST (Goods and Services Tax) and HST (Harmonized Sales Tax) often require more frequent reporting. Whether you're filing monthly, quarterly, or annually depends largely on the size of your business and your sales volume. Understanding the process is crucial to staying compliant and avoiding penalties.

Who Needs to File and When?

When you register for GST/HST, your filing frequency is determined by your business's sales volume. Larger businesses, like ours, are required to file monthly. Smaller businesses might only need to file quarterly or even annually if their sales are below a certain threshold. It's essential to know your filing frequency as it dictates how often you'll need to prepare and submit your tax returns.

Calculating Your GST/HST Liability

Before you can file, you'll need to calculate how much GST/HST you owe. Here's a simple breakdown:

1. Collecting Sales Tax: When you make a sale, you collect GST/HST on behalf of the government. For example, if you sell a product for $100 in Ontario, where the HST rate is 13%, you would charge your customer $113. The $13 collected is the sales tax that you'll need to remit to the government.

2. Claiming Input Tax Credits: If you've made any business-related purchases, you likely paid GST/HST on those expenses. You can claim these amounts as input tax credits (ITCs) to reduce the amount you owe. For instance, if you paid $13 in HST on a $100 expense, you can deduct that from the $13 you collected, effectively netting your tax liability to zero.

Once you've calculated the total GST/HST collected and the ITCs you're eligible to claim, the difference is the amount you'll remit to the government.

Filing Your GST/HST Return

There are two primary ways to file your GST/HST return:

1. Through Your Banking Platform: Depending on your bank, you might be able to file your GST/HST return directly through your online banking platform. This method is convenient as it allows you to manage your payments and filings in one place. However, not all banks offer this service.

2. Using Your MyCRA Account: The most common way to file is through your MyCRA account, where you manage your corporate and personal taxes. Once logged in, you'll find a pre-populated form where you can enter your revenue, expenses,  and GST/HST collected. After submitting, you'll know if you have a balance owing or if you've successfully remitted the correct amount.

Gone are the days of filing paper returns or sending in faxes. The CRA has streamlined the process to be online, making it easier for businesses to stay up to date with their tax obligations.

Filing your quarterly GST/HST returns doesn't have to be stressful. At Gauvreau, we specialize in helping businesses navigate their tax responsibilities with ease. Let our team of experts handle the complexities of your sales tax filings so you can focus on growing your business.

Contact us today to learn more about our tax services and how we can support your business. Visit our website to get started.