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I feel like a idiot..please help

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  • I feel like a idiot..please help

    I don't know WTF I am doing in business sometimes.
    This Lady comes in and bitches about having to pay tax. she says I never charged her tax before. sigh... some people I let off the hook and I forget. Then she goes on to tell me that I shouldn't be charging tax unless I am making over 50,000 a year. and says that in the first year you should always show a loss.. blah blah blah..
    I was totally dumbfounded. I felt like a idiot. I don't know if she was giving me sh*t or trying to be helpful.
    I told her I have a ligitamit business and I pay my taxes..
    It was very awkward and I still don't know if I am doing something wrong charging the 5% taxes that we always did at the kennel.
    I was basicly 'pushed out on my own' and I am still trying to learn the business end as I go along. I am a single mom with 3 kids to support, I had to just wing it and go on my own from home, or we would be on welfare.
    I don't know what I am doing. I don't know anything about running a business. All I know how to do is groom dogs. I need a book and an accountant.
    I planned on getting a accountant this month befor tax season.. I have a business licence and I was told by others that I needed to charge GST so I have been! I put the money away in a tax account for when the 'big bill' comes. I am already and debt and wanted to be proactive.
    I feel so horrible like I have been defrauding people. I know I need an accountant, and I am completely embarrased. But my intention was to avoid future debt and run my business above board.
    I need to know right now if I should stop charging the 5% taxes.
    BTW I am in British Columbia. Maybe some Canadian groomers on here can help me out.

  • #2
    You needed to have had an accountant BEFORE you opened for business. Any advice you get here will pretty much be well meaning educated guesses. Pay a professional and do it now. It will cost you a lot more to NOT have an accountant that it will to pay one.
    "We are all ignorant--we merely have different areas of specialization."~Anonymous
    People, PLEASE..It's ONLY a website!~Me


    • #3
      Well I dont know much about where you are, but I learned this yr in starting my own business that many accountants (here) do a free first consultation for people opening a business. They wont do your taxes during the consultation but they will sit with you and answer alllll your tax and biz questions. Check to see if that is an option for you. I learned A LOT


      • #4
        Hi, I'm in N.B. We have to charge 13% tax. After registering my business with the Province, Corporate affairs. I called revenue Canada. I think if you make $30,000. or over you have to charge tax. I decided to right away. right from the beginning. They send me a form quarterly and I submit the tax owed to them. You calculate the tax you collected subtract any taxes you paid out on supplies and utilities etc. then pay the difference. Keep putting the taxes you collect away until you find out what you are doing so you don't end up with any suprises. I think if you aren't registered and aren't making over $30 you don't have to charge tax, but they might have changed the rules since I started and things are always different province to province. When I started up in Alberta years ago you had to go through the plumbing dept. of the city...go figure. Your safest bet is to call revenue Canada and start asking questions. Good luck. I still have people complaining about charging them tax. They'll say I don't need a receipt. You want to be straight or it might come back to bite you someday. You live in Canada and everyone pays tax, thats just the way it is.


        • #5
          Ok lets help you out!

          I have a book keeper and was told by her that I do not have to collect GST since I will most likely make under $30,000 this year, however, since Iwas paying GST on my orders and things I buy for the business, I could charge it to get my return back that I have paid out and then the government gets the rest.
          So hire a freelance bookkeeper, mine is $20.00 an hour and she spends about 2 hours a month on my books, as I am home based and not doing 20 dogs a day. She also has access to an accountant, but I will be using H & R Block this year to save money, and since the bookkeepre has all my books up to date, it will be cheaper.
          My advice, get a bookkeeper, and talk to someone at H&R block who does business returns, they can answer your questions for free over the phone, and let you know if you are doing things right, they have been a huge help for me!
          AKA Gluergirl/Little_Critters on e-groomer


          • #6
            Ahh, the GST......

            Good Morning Integrity,

            I have a feeling that woman was trying to feed you a line to get a discount. There's always one or two that seem to think Federal taxes/laws don't apply to them.

            Have you registered for GST? Do you have a Business Number? If so, you must collect GST on everything. Once registered, you also are allowed to claim the GST on all your business expenses. Your registration may be not yet be mandatory (depends on your quarterly revenue).

            Please PM me and I'll be happy to help you figure out the details.

            I've posted a link to the Cdn Gov. site for GST registration:
            "The more that you read, the more things you will know. The more that you learn, the more places you’ll go." ~Dr. Seuss


            • #7
              I think you need to collect GST

              I ran a business in Ontario years ago. Had to charge GST.

              The woman is confusing a couple of issues, I believe. Next time someone does that, answer that your accountant told you to do what you are doing, but you will check with him again. That should shut them up.

              The other thing you can do is figure your price plus the correct GST (ask an accountant), then round up to nearest dollar and state that price, saying "$XX dollars, including taxes." Makes it easier. I hated dealing with coins, so I always had a dollar figure and "worked it backwards" to figure tax (accountant will tell you how).

              Since you won't know what you make until you have been in business a year, I think you'll have to collect tax. No good not collecting and then having to submit a lot! And the GST is usually a hefty percentage.


              • #8
                BC Taxes

                I have dealt with BC provincial tax dept when I worked in Corporate America. They were very helpful. Call them!
                My experience from working with the taxpayer services across the US and Canada, they want to help you. If there is a tax liability, you want to know about it now rather then continuing in business, and being hit later by a tax audit and assessment. If I have a chance, I'll try to research this, starting on the internet. Good luck. P.S. never take tax advice from customers, unless they have a background in taxes, sales taxes in your case.


                • #9
                  I am in Ontario....i charge GST right from the beginning as i didn't want to end up forgetting to start once i start making over the amount they say. What i do though is i sorta absorb the GST....all recurring customers get a 5% discount so they are but they aren't paying it ya know? That way i don't have to worry about "change"'s a even $35 or $45 or whatever for the groom! No idea what i'm going to do once the stupid HST comes around though! grrrrr


                  • #10
                    Making the bill easy

                    You're doing the right thing by paying taxes, but like others said - hire an accountant, they're invaluable in the long run.

                    Also, what we do with our fees is include tax as part of the final bill. When a dog is groomed, we charge $36, and that fee includes our sales tax. So, in essence our charge is $34.05 to groom the dog. Rounding it off, it's easier to keep track of. We have a large yellow sign posted that says all fees include sales tax.

                    Most small businesses show a loss the first year, but not necessarily so.

                    Good luck!


                    • #11
                      if you bring in more the $30,000 a year you must charge tax.

                      If you bring in less then $30,000 you do not have to (even if you are registered)

                      Once you start chargin tax you must always charge tax.

                      Why let some people slide??? Charge everyone the same, makes it easier on your head and keeps is legal.


                      • #12
                        Originally posted by Integrity36 View Post
                        I don't know WTF I am doing in business sometimes.
                        This Lady comes in and bitches about having to pay tax. she says I never charged her tax before. sigh... some people I let off the hook and I forget. Then she goes on to tell me that I shouldn't be charging tax unless I am making over 50,000 a year. and says that in the first year you should always show a loss.. blah blah blah..
                        How much you make is none of that womans business, nor is how you choose to handle your books and taxes OR whether or not you are showing a loss (or gain). As long as you are doing everything legal nobody else should be concerned with it, IMO.

                        I guess most people in general are just nicer then I am, because I would have told her to blow it out her......... well, you get the picture.


                        • #13
                          You don't have to collect GST if you earn under $50,000. but if you earn more then $10,000. you must collect PST. If you're under $10,000. per year, you're off the hook and can pass the savings on to you clients. You must be sure you won't exceed the PST limit or you'll be making up for all that uncollected tax out of your own pocket. What you deduct from your gross income has nothing to do with it and either way it's none of that lady's damn business and you can bet I'd tell her so! Hope this helps ;-)
                          "The gift which I am sending you is called a dog, and is in fact the most precious and valuable possession of mankind"-Theodorus Gaza


                          • #14
                            Definitely have a chat with an accountant. There are lots of house expensen you can claim if you are working from home. You can write off a percentage of most of your household utitlity bills and property taxes, etc.

                            Also talk to them about doing the GST "quick" method. Rather than keeping track of the GST you pay for supplies, you simply use a certain percentage. eg. I collect 5% and only pay back 3.x% (can't remember the exact %).