Contractors, Self-employed, Sole Proprietors in BC – Understanding Goods and Services Tax (GST)

If you are thinking of becoming a contractor, self-employed or a sole-proprietor one of the most important things you should be aware of is GST, and your GST obligations. Filing GST is as important as filing your tax return, and should be taken seriously. Failure to charge, file and remit GST can be very costly with penalties and fees from CRA.

What is GST?

Goods and services tax (GST) is a 5% tax that is charged on top of the cost of goods and services provided within BC. You will see GST being charged on receipts for GST qualifying items that have been purchased.

Who needs to charge GST?

If you are a contractor, self-employed, sole-proprietor, partnership or corporation selling goods or providing services within BC, and expect to record sales over $30k within a 12-month period, you are required to charge GST on those goods or services. There are some types of services and goods which are GST exempt, it would be wise to contact an accountant to see if your product or service is GST exempt.

What do you do with the GST received?

If you have identified that your service qualifies for GST, and have successfully applied for your GST number through CRA you can start charging GST to your clients. Unfortunately, the GST collected from your clients is not free money. You will be required to remit the GST to CRA, depending on your annual revenue you will be required to remit monthly, quarterly or annually.

Be organized, keep receipts

When you file your GST return, you will also be required to keep all supporting documentation for your claim that is filed. You should treat it the same as filing a tax return, as audits by CRA can happen. If CRA request evidence of your GST charged or ITCs (Input tax credits) claimed, you will be required to send information to CRA. Failure to produce the information requested from an audit may result in penalties being imposed by CRA, and future audits are more likely if you have been unable to provide them with evidence.

Benefits of filing with a professional

When filing a GST return you need to be sure that the claim filed with CRA is correct. If CRA perform an audit and the information provided shows that there has been an error with the claim, there may be penalties. Having an accountant or tax return specialist file your GST return will ensure that an accurate GST return is filed. An accountant or tax return specialist will make sure that all available ITCs are claimed, which will result in the best possible financial outcome for the GST return being filed. Some accountants (ourselves included) will assist with CRA audits, and will assist with navigating audits by offering advice and preparing correspondence.

Questions

If you have any queries related to your GST responsibilities, or about filing/remitting your GST to CRA please get in contact. The team and Jacks Tax Back will be more than happy to answer any questions you may have, as well as providing a GST filing/remitting service for you. Tax doesn’t have to be taxing.

Returning Home from Canada in 2018 – Filing a Tax Return

For those whose IEC time and working holiday visas have finished or coming to an end this year, we have a few tips from the Jackstaxback team to help make the transition as smooth as possible, when filing your 2018 tax return.

Pass on your new contact details to all 2018 employers

The most common issue we see from clients who are former IEC members is a missing T4. Unfortunately, not all employers are as organized as all IEC members, and will accidentally lose T4s by mailing them to an old Canadian address or incorrect email address.

When you hand in your notice to your employer, we recommend that you update them with your future mailing address, as well as ensuring they have your correct email address on file. You are required to submit a tax return with information from T4s from all 2018 employers, which should be issued to you in early 2019. As an IEC member, working holiday or other temporary foreign worker, it would be easiest to receive your T4 via email, that way you will always have access to an electronic copy, and avoid the T4 being lost in international mail.

Know your tax residency status

This can be the most confusing part of filing a tax return. If you filed last year or a previous year as a newcomer tax resident, and have a permanent leaving date from Canada (for work purposes) in 2018 you will most likely be filing your return as a tax emigrant. However as with all things ‘tax’, it is beneficial to consult a tax professional regarding your tax residency, in order to make sure you are 100% tax compliant when filing your tax return, and also to ensure you receive the largest tax refund possible.

Making mistakes with your tax residency can lead to incorrect, potentially smaller refunds and extremely long delays with receiving your deserved tax return.

Update your details with CRA

There is not many more annoying things on earth than having your hard-earned tax refund cheque mailed to an old address in Canada. Especially when it should have already been deposited into either a Canadian account you have left open, or mailed to your correct foreign address. So, how do you update your contact details with CRA? When leaving Canada for good you should contact CRA and update them with either your foreign address, or your Canadian bank account details in order to receive your tax refund via direct deposit (if you plan on keeping an account open).

More information on doing this can be found on the official CRA website.

File a tax return!

After the effort of ensuring you receive all the required documents to file a tax return, and inform CRA of your new personal details, do not forget to file a tax return! You are legally obliged to file a tax return in Canada if you have worked at some point in Canada within the previous calendar year. There is also a high possibility that you will be due a tax refund. With a quick and free tax return quote provided by Jackstaxback, you will be able to see how much of a tax refund you are entitled to.

Further questions

If you have any further questions regarding your 2018 tax return or all other tax matters, why not send us a message. Our experienced team are more than happy to answer any questions you may have, after all, tax doesn’t have to be taxing.

Self-employed contractor? Don’t lose money

Thousands of self-employed workers, contractors and sole-proprietors lose out on some of their hard-earned dollars by failing to file their Canadian tax returns correctly. We have provided several simple tips you can follow to ensure that you don’t over pay the tax man.

Tips

Understand your expenses

The easiest way to reduce your taxable earnings is by applying as many allowable expenses as possible against your self-employed / contractor / sole-proprietor income. It sounds simple, the lower your taxable income, the lower your tax balance to CRA

Lesser known expenses

Make sure you are well aware of the long list of expenses which can be entered onto your Canadian tax return. Please note that the list of allowable expenses varies from other countries in which you may have previously files a tax return. A couple of the most commonly missed expenses, or incorrectly claimed expenses are the office use of your home and vehicle use expenses.

Be organized

It is important to make sure that you have receipts for all of the expenses claimed on your Canadian tax return. By filing or organizing your receipts throughout the year you will be in a great position to have your tax return correctly filed at year end. Many expenses can be missed if receipts are misplaced or lost. Each receipt lost for an allowable expense is going to result in a higher tax balance owing to CRA.

Prepare for an audit

There is always the possibility that CRA will audit your Canadian tax return. The most common type of audit will be a request to produce receipts for an expense type. Ie – Gas (for vehicle use). In which case you will be required to send copies of your gas receipts which were used to make your ‘Gas’ claim on your tax return. Failure to produce these receipts will result in your tax return being re-assessed, and the ‘gas’ claims being removed from the return.

Understand GST

The majority of contractors, self-employed and sole-proprietors will be providing goods and/or services through their work. If you earn over $30k in a 12-month period providing a service or goods, you will be required to charge GST on your services/goods and remit the GST collected to CRA. Failing to be GST compliant can result in hefty fines and penalties. If you will earn under $30k in a 12-month period you will not need to worry about GST.

Benefits of using a tax return specialist

When using a tax return specialist to prepare and file your tax return you will be in safe hands. They will ensure that as many allowable expenses as possible are applied against your income, and provide you with the best tax return result possible. Some tax return specialists, ourselves included, will also assist their clients if they are presented with a CRA audit. If you wish to enquire about our services at Jackstaxback we offer a free consultation for self-employed, contractors and sole-proprietors looking to file their Canadian tax return.

Questions

If you have any questions or queries about your contractor/self-employed tax return, please do not hesitate to shoot us a message. Our experienced team will be more than happy to answer your questions. Tax returns don’t have to be taxing

Self-employed? Don’t Let The 15th June Deadline Pass You By


For those that are self-employed contractors in Canada and have not filed your return, the June 15th marks the deadline for when you will start incurring late filing penalty.

The late filing fee is certainly worth avoiding if possible and you aren’t too late to get your self-employed tax return.

What are the late filing fees after the deadline?

It is 5% of you balance owing, so if you owe $5,000 to CRA, this would be an extra $250 on top. Not cool. In addition to this, you will also pay 1% extra for each additional month that is past the deadline date, for a maximum of 12 months.

For those that are really behind and haven’t filed for 3 years you will be hit with a 10% penalty on your current year. So it’s certainly worth getting your tax affairs in order as soon as possible.

Interest on balance owing

The bad news isn’t quite over yet, however, as you will already haven been accruing interest on your balance owing at a compound daily rate, due to the passing of the April 30th deadline on balances owing.

Am I self-employed?

It is not uncommon to be unsure whether you fall into the self-employed category or not, and if you have any questions on the matter don’t hesitate to contact us.

Generally speaking, if you are not having tax already deducted from your pay cheque, such as being paid directly or cash in hand, this classes you as a self-employed contractor. In these cases you are legally required to pay tax on these earnings when filing a tax return.

What is GST/HST and is there a deadline to file a remittance

For those with a GST or HST number, that have been charging GST/HST on their services throughout the year. You will also need to file a GST/HST remittance on the 15th of June deadline.

Rounding up

If any of the above applies to you and you need to file your self-employed tax return or GST/HST remittance, email the team today for a free quote and consultation. Don’t be stung with the late filing fee and compound interest rates.

Missed the deadline? There is still time to file your 2017 tax return

Are you one of the many that have not yet filed your tax return for 2017, or any other year? The good news is that it’s not too late to file.

While it is true that there is an official tax deadline date of midnight April 30th, 2018 you can still file after this date.

Excited? We thought you might be, so why not email us  with your T4 and we can get the ball rolling on what will hopefully be a juicy tax rebate before summer starts.

If you still have some questions on tax returns and what you need to file then here are a number of the most commonly asked questions.

How do I get my T4, and what is it?

In order to provide an accurate quote and file your tax return, we will need a copy of each of your T4s. A T4 is a summary of your earnings that is provided by your employer. If you don’t have one then get in contact with your employer right away, and most are very quick to provide it to you.

Once you have this, send it through and we’ll get a quote to you in 24 hours. Sound like a plan?

I only worked part of the year, can I still claim my tax back for 2017?

One of the most common misconceptions is that if you only worked part of the year, it is not worth filing. Depending on your tax residency status and a number of other issues, part-year returns often produce the largest tax rebates.

How do I determine my Canadian tax residency status?

While some things in life are black and white, unfortunately determining your Canadian residency status for tax reasons can be anything but straight forward. Fortunately, we are here to help and can provide a free quote and consultation, helping to determine if you are a resident, non-resident or anywhere in between (yes, there are more than just two, such as Factual and Deemed resident).

The information from CRA on tax residency is unfortunately not as helpful as other areas of their website, so if you are in any doubt then get in contact, we’d be pleased to help.

What is the cost of filing my return?

We offer one of the cheapest tax returns in Canada and charge a flat $45 fee for a personal tax return. Unlike many other taxback companies, we don’t charge for additional documents. For those that are self-employed, it is a flat $150 fee. This is inclusive of GST and any other hidden fees that can often be added on.

If I am no longer a resident in Canada, or have left the country, can I still file? 

Most definitely! Every year thousands of people leave the country without filing a Canadian tax return. For those that have left Canada or no longer reside in the country, it is still quick and easy to file your tax return.

Further questions?

If you have any unaswered questions then don’t hesitate to get in contact with us. We don’t bite, promise.

JacksTaxBack.com First Canadian Tax Return Company To Accept Bitcoin, RaiBlocks And Other Cryptocurrencies

JacksTaxBack.com is happy to announce that for the upcoming 2017 tax year and beyond, we will now be accepting a number of different cryptocurrencies, as a form of payment for your tax return.

You talked, we listened.

With a number of requests in the last few months, we are now accepting the following cryptocurrencies as a way to pay for your tax return. Our current list of accepted cryptocurrencies are:

Bitcoin
Ethereum
RaiBlocks
Bitcoin Cash
Litecoin

Why would you want to pay your tax return fee in Bitcoin or other cryptocurrency?

With an increasing number of people reaping the rewards of their early investment and adoption of cryptocurrency gaining new heights, it seems only fair that you should be able to pay for your tax return in this way.

With cryptocurrencies offering quick transaction speeds and low fees, with RaiBlocks being completely free to transfer between accounts, it has never been easier to pay for your tax return in cryptocurrency.

The other people that will greatly benefit from paying in cryptocurrency are those that no longer have a Canadian bank account, with it greatly helping to break down the borders and provide a simple and easy way to pay for your return.

Is there a cryptocurrency you want to see us accepting?

If there is another cryptocurrency you want to see us accepting then why not get in contact with us today, we’d be pleased to look into officially accepting new coins.

Talking of Bitcoin and cryptocurrencies, what are my tax obligations?

For those not sure about their tax obligations for Bitcoin, or asking the question ‘do I need to declare my Bitcoin earnings or profit’ drop us a line and we will bring you up to speed.

Can I claim capital losses from cryptocurrency investments?

In certain circumstances you reduce your tax payable, or increase your tax rebate, by using any capital losses sustained through cryptocurrency investments. Talk to the team at JacksTaxBack.com to get the coin rolling on your tax return.

JTB now accepting cryptocurrency

What To Know For Filing Your 2017 Tax Return

For those that are newcomers to Canada and are looking for help on filing your 2017 Canadian tax return, we have some commonly asked questions answered.

What is a tax return?

In its most basic form, a tax return is a way of calculating if you are due a tax refund, taking your total income and tax paid for the year, calculating whether you have overpaid or underpaid tax for the year.

Should I file a tax return?

Filing a Canadian tax return is highly advised for a number of reasons. Firstly, there is a very good chance that you are due a tax refund and with our free quote that is offered, it is quick and easy to see how much of a refund you are entitled to.

In addition to this, there are other benefits too, as you will also have your eligibility assessed for a number of tax credits and benefit payments for low to middle income earners, such as GST/HST, Working Income Tax Benefit and the Trillium Benefit.

What documents do I need?

In order to file a tax return you will need to have a copy of your summary of earnings from each employer. This is also called a T4 and will be provided to you at the start of 2018, detailing your total earnings and tax paid during the 2017 year.

Employers are legally required to provide you with your T4 before the end of February. As soon as you have your T4 you can get a tax quote for 2017.

How do I file a Canadian tax return in 2017?

While you can file a Canadian tax return yourself, for those that are newcomers to Canada it is a good idea to have a tax professional look at your situation. As you may be entitled to claim back expenses and other reductions, you should either conduct a considerable amount of research before filing, or use a tax professional to gain your highest refund possible.

When can I file a Canadian tax return?

You can file your 2017 Canadian tax return once you have your summary of earnings from your employer (T4).

When is the deadline for filing a 2017 Canadian tax return?

While the deadline for filing a 2017 Canadian return is at the end of April 2018, you can still file after this point. Filing as soon as possible is highly recommended though, as any benefit payments and tax credits may be delayed or stopped if this is not done.

What is my residency status in Canada as a newcomer?

For the majority of newcomers to Canada, you will likely be a resident for tax purposes. If you are not sure, get in contact with one of our team members, who will be able to ask questions to determine your residency status.

What expenses can I claim on my 2017 tax return?

There are a number of different expenses that you can claim on your 2017 tax return, such as charitable donations and medical expenses. Taking the time to research what you are allowed to claim on your 2017 tax return is vital to getting the highest return. If unsure, get in contact for a free consultation and quote.

Further questions?

If you have any further questions why not get in contact with us, as we’d be more than happy to answer any questions you have. Tax doesn’t have to be taxing, after all.

Newcomer to Canada? 5 Essentials Reasons To File

5 Reasons To File Your Tax Return

Are you a newcomer to Canada? Confused by whether you need to file a tax return? Here are 5 great reasons to file your tax return in Canada as soon as possible.

1. GST/HST tax credit application

One of the lesser known facts about filing a tax return, is that it also doubles up as an application for the GST/HST tax credit.

Essentially, this is a free tax credit for low to middle income earning individuals or households, with the majority of newcomers to Canada qualifying for this tax credit payment. This is paid on a quarterly basis, with the earlier you are able to file your tax return, the sooner you will start receiving these payments.

If your household (or as a single individual) you earn $44,000 per year or under, you are almost definitely eligible to receive this tax credit, with the average quarterly payment being $105 every three months.

Certainly a good reason to file your Canadian tax return, even if you aren’t due a large return, or are required to pay a small amount of tax.

2. Working Income Tax Benefit

Along with the GST/HST tax credit application, certain individuals may be entitled to the Working Income Tax Benefit, which can greatly increase your entitled refund amount. A tax professional will know whether you are able to claim this benefit or not, with their being a number of criteria that must be met.

3. Refund

The main reason that many people file their tax returns in Vancouver, Burnaby, Calgary and all across Canada, is due to the potential refund. Being a newcomer to Canada (including those on Canadian IEC visas – International Experience Canada) you are highly likely to receive a refund in your first year.

If you aren’t sure, we can provide a free and no obligation quote. Simply send us your T4 (summary of earnings), along with the dates you entered Canada and we’ll have a quote to you shortly.

It is not uncommon for newcomers to Canada to be eligible for a return that could be several hundred dollars, or even reaching one or two thousand, depending on how much was earned and the tax already paid.

4. Prerequisite for your permanent residency application

With the streamlining of PR applications, an increasing amount of people are being caught out with not having their taxes up to date and filed.

This can lead to a delay in applying for your permanent residency, with proof of tax filing often required before you can submit your full application. While we can process tax returns within 24 hours of receiving all information, CRA (Canada Revenue Agency) can take several weeks to process the return on their end and issue your notice of assessment, potentially delaying your application by a considerable amount of time.

5. Mortgage requirements

Even though you are a newcomer to Canada, you might be in the hunt for a property of your own. If so, having your taxes up to date and current is essential for gaining a mortgage. Similar to the delay in PR applications mentioned above, your mortgage application might be on hold until you are able to provide a notice of assessment for the prior years.

Rounding up

Along with these great reasons to file your Canadian tax return, you are legally obligated to file if you have to pay tax in that tax year. Additionally, you must also file a return if you want to submit for a tax refund or rebate.

You can get a free and no obligation quote by simply providing your T4 (summary of earnings) and sending it to us with your date of entry and exit to Canada (if applicable), so what have you got to lose?

Tips For Filing Your First Canadian Self-Employed Tax Return

First time filing self-employed tax return

Tips For Filing Your First Canadian Self-Employed Tax Return

Whether you are a newcomer to Canada, or are filing a self-employed tax return for the first time and need some help and advice, we have some pointers for you.

Firstly, it is essential to fully research your self-employed tax return before filing, as this can be the difference between you owing a small amount of money, compared to a large balance owing.

Tip 1: Understanding your eligible expenses

One of the most critical points of doing a self-employed tax return, is understanding what expenses you are eligible to claim.

There is no quick way to establish your eligible expenses, with the two main options either being to take the time to thoroughly research what areas you are able to claim, such as office use of your home, vehicle use and supplies, or using an experienced tax return company.

The other option would be to use a professional tax return company to help file your self-employed tax return, in order to find out the most effective way of utilizing your expenses and reduce your amount payable. Failure to apply all available expenses can result in you owing a substantially larger amount of tax to CRA, in excess of what you should be paying.

Tip 2: Claiming capital cost allowance (CCA)

Following on from eligible expenses, capital cost allowance is perhaps the most important area to understand, in order to get the best result possible with your Canadian self-employed tax return.

Capital cost allowance (CCA) refers to assets that were purchased in order to help carry out your business or self-employed work activities, and can be claimed on your tax return. This can be carried forwarded to future years, for the financial life of the asset.

The purchase of a work laptop, for example, can be used in a number of subsequent years when filing a tax return, once the depreciation of it has been applied. This can help greatly reduce the amount of your tax payable and is a necessity for getting the best result possible.

Tip 3: Importance of invoicing

If you fail to report income, whether this is deliberately or non-deliberately, you can be hit with a 20% penalty for your undeclared amount. This can add up to a huge sum of money, making invoicing and declaring earnings very important.

One of the best ways to remain compliant, is to ensure you are keeping a tidy invoicing schedule, along with a suitable track of your earnings.

Tip 4: Understand GST (goods and service tax)

Depending on the service that you offer, along with the amount of income you earn, or are expecting to earn, will determine if you need to be charging GST.

GST is a 5% goods and service tax that is added to your invoiced subtotal, with your total amount from the year being required to be remitted to CRA. For those who expect to be earning over $30,000 a year, a GST number is a requirement. Failing to charge your clients GST can result in CRA forcing you to pay this amount yourself. This can be a very costly mistake to make, so ensure you are in the know with your GST obligations.

In addition to providing self-employed tax return services, we also provide a GST filing service, to assist with your GST remittance obligations. Please note GST remittance is entirely separate from your tax return, and for this service we charge a very reasonable $30 per year, if applicable to you.

Getting professional insight and advice with your self-employed tax return

Filing a self-employed tax return for the first time in Canada, can be a daunting experience.

We offer a free consultation for any self-employed or contractors that are filing their Canadian tax return, whether this is their first year or not. If you wish to file we charge a flat fee of $150, with no hidden charges or fees.

If you have any questions don’t hesitate to get in contact with the team today, and we’ll do our best to assist.

Not filed your 2016 tax return? It’s not too late

Have you filed your 2016 tax return in Canada? If not, it’s not too late to file.

While the official deadline from CRA (Canada Revenue Agency) was 1st May 2017, if you are due a tax refund there are no penalties for filing late.

Not sure if you are due a refund? Email us your T4 and we can provide a free tax quote with no obligation to file.

What if I don’t have my T4?

If you don’t have your T4 then worry not, as we can still file your return. This will mean, however, that we won’t be able to provide an exact estimate of what your return will be.

How do I know if I’m due a tax refund for 2016, or another year?

If you are unsure if you are due a tax refund or not, why not take advantage of our free Canadian tax quote service that we offer. Simply send us an email with your T4 (summary of earnings) from each of your job positions and let us do the rest.

Additionally, you can can also file a tax return for any other year that you have worked in Canada. Even if this is only for a short period, you are likely due a refund for that year.

How much will filing my tax return cost?

Once we provide you with your free tax quote for 2016, it is then your decision if you wish to file with us. If you do, we charge a flat $40 fee for filing, though there is no obligation at any stage if you don’t wish to continue.

I’ve left the country, can I still file?

If you have left Canada and still need to file your Canadian taxes, you can certainly still file. Even without a Canadian bank account or address to use, we can organize a cheque to be sent to your address overseas.

Further questions?

If you have any unaswered questions then don’t hestitate to get in contact with us. We don’t bite, promise.