- April 7, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Confusion Over Tax Issues for Freelance Gardener in BC
Hi Everyone,
I’m a BC resident and have been struggling with some tax issues that I could really use some help with. If anyone is willing to guide me through this process, I would greatly appreciate it.
I have been working as a freelance gardener-for-hire for many years, but only recently have I started to see an increase in my income due to positive changes in my life and work habits. I have crossed the $30k income threshold for GST and now need to start charging GST on my services. However, there are a few things that I am not clear on and could use some assistance with:
– Do I already have a business number (BN), or do I need to register for one?
– Can I get a BN with just my name, or do I need to create a business name?
– If the process of applying for a BN and a GST number takes time, is it possible to pay the GST owed on jobs retroactively?
– Is it true that I cannot charge GST without a GST number, and how do I proceed if obtaining these numbers will take some time?
I tend to overthink things, especially when it comes to finances, and I want to ensure that I am doing everything correctly as a new business owner. Any advice or guidance on this matter would be greatly appreciated.
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Yes a BN will be your name and will have COB as “The Healthy Gardener” or whatever. Unless you incorporate your legal business name will be your name as known to CRA.
As I recall both the application for a business license and the GST application approval et all is pretty well instantaneous. You apply, and get your number. Its just a series of text applied to the end of your federal business number, like 56837576 RT001.
You are not supposed to charge GST without a number, but you technically are responsible for getting your act togther promptly upon hitting that $30K threshold to apply. Which is what you are planning now. But I would not worry about the week or so that might pass before all the ducks are lined up and the license issued, vs thepittance of GST that might be missed.
Just remember you can’t start booking Income Tax Credits on GST paid out until you have the GST number. With ITC, you collect say, $100 in GST from customers and this amount owing to CRA is offset by the cost of GST you paid as a business to earn your income. So if you spent $90 in GST on supplies, you only owe CRA $10. If you spent $110 on GST, CRA will send you $10. YOu will keep track of expenses both cost with and without GST included, as different parts of the T2125 want different numbers representing earnings. Grab a download of the T2125 return from CRA to understand about your expenses, cost of goods sold etc. IT will help you even if you keep w the accountant.
CoG sold essentially says, you might have bought 1000 tree stakes for $1000 but you only sold 50 trees requiring 2 stakes each, so you can only write off in the tax year the cost of 100 stakes, with the remaining 900 being considered inventory to be used up and written off as the supplies are consumed.
You don’t need to register for a business name if operating under your legal name.
Yes you have to register for and charge HST/GST to CDN customers once you hit $30k in revenue. See the last link in the trigger for more info: !SolepropTrigger
Your accountant should be able to help you with this.