I registered for GST earlier this year (February 2021). I read about the Quick Method and I realized if I would do it, it would save me some $ and of course simplify my taxes (sole proprietor).
However, some things are not clear to me:
A) Am I allowed to use the quick method within my first year? I checked the official website and from a CRA perspective I am considered as new registrant and from what I am reading I am good to go for the quick method (I am not crossing 400k of revenue). Did I interpret that correctly?
B) I read that I am still able to claim ITC for certain item such as a computer. I am currently renting an office for my work and I was wondering if I can claim ITC for my office as well (while using the quick method) or is my office not entitled for it?
C) Can I claim ITC for my business website / business email while using the Quick Method?
The best person to direct Tax issues to is your business’s tax accountant, who has studied the very complex tax law issues regarding business income taxation. (Income tax act, excise tax act, etc)
Quick method might be more expensive in your business - cannot tell from here, but your business’s accountant can
Getting (faulty/incomplete) legal advice from the internet can be legally dangerous.
I have assumed from your post that you are not a professional tax preparer, using this tax software.
In tax, the questions may be “simple”, but the answers NEVER are …
Make sure what your line of business is qualified for quick method. Not all businesses are qualified for this. Ex accountants, banks, etc
You need to elect by filing an application with CRA or Revenu Quebec (only if business operates in Quebec)
The main purpose of the Quick Method is to help small businesses in simplifying the process and then maybe save some pennies.
ITCs are not allowed for any kind of operating expenses such as office rent etc. Only acquisition of CAPITAL ASSETS can give you entitlement to ITCs.
The 1% reduction is only applicable to the first $30,000. So make sure someone with experience files your remittances to make sure the calculations are accurate.
The difference between GST/HST received and remitted must be reported as part of your income for income tax purposes.
Thank you so much solutions2f for your help! Highly appreciated!
All your points are clear so far.
I am a self employed web designer with approx. 150k in revenue…
The only question left is about being a new registrant. Assuming I full fill all requirements for the quick method, can I use this method within my first year of operation?