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Archive for the tag “GST”

CRA info for businesses and individuals affected by the Fort McMurray and north-east fires

The CRA has issued a news release for those people affected by the recent fires in Alberta. 

I called the CRA this afternoon to get a bit more information for one of my customers who has lost her home in Fort McMurray. I found out that the CRA has set up a Fort McMurray help line. Call the general phone line at 800-959-8281 (individuals) or 800-959-8281 (businesses) and ask to be transferred. The Fort McMurray help line is located in Calgary and currently open 8-6pm MST.

If you are affected by the fires and unable to file or pay your taxes on time, you can request taxpayer relief. You can submit your request by filing form RC4288.

Here are a few things I found out about the form:

Who should file this form? Individuals or businesses affected by the fires who are unable to file or pay their taxes on time. This includes sales tax and payroll tax. Complete one form per taxpayer/business.

When should I file this form? As soon as you get any notices with penalties and/or interest. If you haven’t filed your tax return yet, wait until you do so. Don’t file the form until/unless there are penalties and/or interest to waive.

How should I file this form? Mail your form to the Winnipeg Tax Centre. The address can be found on the bottom of the form. You can also submit the form online using the CRA My Business Account or My Account for Individuals if you have it set up. Anyone you have added as a representative (your accountant or bookkeeper for example) can also submit this form online. As of right now, requests are not being taking over the phone, but this could change.

What address should I use? Use any address where you’re currently getting mail. This does not have to match what the CRA has on file, it’s simply a mailing address.

What about section 3 – Supporting documentation? The form mentions a police/fire report and insurance statements. I was told that as of right now, the CRA doesn’t have a whole lot of information on what exactly will be required if you’re filing for relief. Call before filing to find out what is required.

This is the information I have as of today. I’m sure that the CRA is busy sorting out the particulars and getting agents up to speed on processes. Again, if you have any questions at all, please call the help line. They are very helpful. My heart goes out to all of those affected by the fire.

The top 10 things you need to know about QuickBooks Online and GST/HST

If you’re just getting starting using QuickBooks Online (QBO), here are a few things to know about GST/HST as of the date of this blog. I’m using the Harmony version.

1.  First things first. You need to set up Sales Tax in order for it to be active in QBO. Select the Sales Tax tab from the menu bar on the left hand side and click on the Set up tax button. Follow the onscreen prompts to complete set up.

Set Up Sales Tax

2. QBO automatically adds two default accounts when setting up GST: GST/HST Payable and GST/HST Suspense. Think of the GST/HST Suspense account as a clearing account. You can even rename it as such. NOTE: You cannot write a cheque that posts directly to the GST/HST Payable account. You can, however, write a cheque that posts directly to the GST/HST Suspense account.

Two Default GST/HST Accounts

3. There are no ‘sales tax items’ in QBO like there are in QuickBooks Desktop. Therefore, journal entries must be entered a bit differently. See #9 below.

4. Completing the Sales Tax Return creates a two-line Journal Entry that simply moves what you owe (or what is owed to you) from GST/HST Payable to GST/HST Suspense. If you create a Payment for that period, you are crediting your bank account and debiting the GST/HST Suspense account. If you create a Refund for that period, you are debiting your bank account and crediting the GST/HST Suspense account.

5. When preparing your return, be careful to set the correct dates and click Refresh to generate an accurate report. Watch for yellow highlighted areas when you prepare a return. If  you have any, stop and review. Double and triple check the dates at the top when about to File Return. This is because…

6. You cannot modify or delete the journal entry that QuickBooks creates when you file a sales tax return. 

Can't Do That

7. Regardless of the date you filed your GST/HST return, QuickBooks uses today’s date for the journal entry that is created when you file a sales tax return. Excel will become indispensable if you’re troubleshooting!

8. When you make a payment (or receive a refund) for a return you just filed, you must be sure to do so by clicking on Record under the Payments column. Do not make a payment using the big blue Record a Payment  button – this is meant for upcoming filings and will create a discrepancy on your next return if used improperly (see #5 – yellow highlighted lines). You’ll know you’re in the wrong payment window if the tax period says Upcoming Filing. Make sure you enter the correct date. I recommend entering a memo as well, for example, “January 2014 Return.” NOTE: when you file a return and create a payment, the payment cannot be printed.

Pay using this button

9. Posting directly to the GST/HST Payable account via journal entry is BAD, even though it’s allowed. Although it will post to the balance sheet account, it won’t show up when you go to file a sales tax return. But don’t panic, Intuit has designed something even better – the ability to assign sales tax to each line of a journal entry. No second independent line for GST/HST needed. When entered this way, it will show up on the return. Accountants commonly post directly to the GST/HST Payable account, so please make sure they know this crucial tip. 

Don't Do This

Do This Instead

10. Made a mistake on your payment and need to change it? You need to delete and re-enter it. But you won’t be able to access the payment from the registers (here you can only view it). You also won’t be able to access it from the View History section of the Sales Tax module. Instead, do this. Use the Advanced Search feature to search for the amount of the payment (see below for suggested filters). Click once on the transaction to open, select delete payment, confirm, then start over using the instructions in #8.

How to Search for a Payment

I hope this article assists you in navigating GST/HST in QuickBooks Online. Please be sure to leave a comment if you have any tips to add. And if you’re really stuck, feel free to contact me to schedule a troubleshooting session.

Why is my previous QuickBooks GST/HST ‘File Sales Tax’ journal entry incorrect?

ISSUE: the journal entry that QuickBooks automatically creates when filing sales tax is not entered correctly. The most common problem is missing tax items. You may also see missing information on the memo line, and you may even see the tax items switched around.

This happened to one of my clients this week. He noticed an ‘unassigned tax amount’ when attempting to ‘file sales tax.’ He clicked on the amount and it took him back the journal entry that QuickBooks had created for the previous sales tax filing. We then started to uncover some strange errors…

Here’s a screenshot of what a normal FILE SALES TAX journal entry should look like:

Correct JE for File Sales Tax

And here are two screenshots of the incorrect FILE SALES TAX journal entries discovered in my client’s file:

Incorrect JEIncorrect JE #2This is a known issue. QuickBooks senior tech support tells me it’s essentially random. It started with the 2012 R12 update and the 2013 R4 update. It’s considered a critical issue with moderate severity and high impact. The engineers are working on completely removing this issue. 

SOLUTION: Go back to the incorrect journal entries that QuickBooks created and manually correct them. Review previous, current, and future tax filings carefully.

My advice until Intuit works on eliminating this potential problem is to keep current with your updates and CHECK YOUR ‘FILE SALE TAX’ WINDOW CAREFULLY BEFORE FILING! Watch out for unassigned tax amounts. If you have any, drill down on the amount. If you end up in a previous ‘File Sales Tax’ journal entry, and you spot something wrong, you’ve likely encountered the ‘File Sales Tax’ bug! You will need to correct the journal entry by entering the correct tax items. If you discover information missing from the memo line, correct that as well. You can refer to previous filings for missing information.

NOTE: these errors carry over to the next sales tax return. If you discover more than just the last “File Sales Tax’ journal entry incorrect, your previous filings with the CRA could have errors.

Other tips for spotting errors in the File Sales Tax window: Manually multiply line 101 by the tax rate in your province for a ballpark figure of what line 103 should be. Drill down on line 103. Look for a balance leading into the period. This will be zero if you have not made changes to your sales after your last filing. Drill down on line 106. Again, look for a balance leading into the quarter. This will also be zero if you haven’t made any changes to your purchases after your last filing.

Be careful when troubleshooting your sales tax, and always make a backup of your file before making any changes.

I’d love to hear from you if you’ve run into this particular bug!

Holy Colour, Batman! QuickBooks 2013 R6 update released in Canada

The R6 update for QuickBooks 2013 is now available for Canadian versions of QuickBooks. If you’ve selected the option for AUTOMATIC UPDATE*, you should be prompted to install the update when you open the program. If not, you can go to HELP > UPDATE QUICKBOOKS > UPDATE NOW and select GET UPDATES. The other option is to manually download the update. Here’s a link to the support page which provides the link, and also, a link to the release notes:

How to manually install QuickBooks 2013 updates

The R6 update introduces the “Company File Colour Scheme” which replaces the “Company Colour Flag” preference. If you use it, it’s suddenly a blast of colour when what you’re used to seeing is a tiny little flag! Orange was okay when it was just a flag, but wow, is it ever bright when it’s the entire title bar! Some of the colours are equally as shocking. I’ve settled on the blue-medium which is fairly easy on the eyes. Here’s where to find it if you don’t have it set: FILE > PREFERENCES > DESKTOP VIEW. Choose the MY PREFERENCES tab and choose a colour under the COMPANY FILE COLOUR SCHEME.

The R6 update also clears up some of the ‘real estate’ issues I was complaining about in an earlier post, along with several other fixes and improvements, many for the Enterprise version. The release notes don’t say anything about the “Fatal Application Exit,” which I continue to get pretty much every day I’m working in QuickBooks. Here’s what Intuit says about the problem:

Error: QBW32.EXE – Aborting Application: QuickBooks is now terminating when working in 2013

I’m still anxiously waiting for the new feature where I have the ability to collapse specific sub-accounts on financial reports to show up in Accountant Edition and Premier and not just Pro!

*NOTE: to set your copy of QuickBooks for AUTOMATIC UPDATE, go to                      HELP > UPDATE QUICKBOOKS > OPTIONS and select the YES radio button next to AUTOMATIC UPDATE. You can also choose whether to used a SHARED DOWNLOAD if you’re in a multi-user environment.

How do I get the correct date range to show when “Filing Sales Tax?”

When you use the FILE SALES TAX feature of QuickBooks and your from and to dates don’t coincide with your actual filing dates, you haven’t indicated the correct date range. It’s fairly simple to manually change the date range for the period that you’re filing, but you can set this up so that the correct date range automatically shows up each time you open the FILE SALES TAX window. Here’s how to set the default date range in the Canadian version of QuickBooks:

Go to the VENDOR CENTRE and double click the vendor RECEIVER GENERAL. Then click on the TAX AGENCY INFO tab. Choose your Reporting Period (Monthly, Bimonthly, Quarterly, Bi-annual, or Annual). Then choose the Period Ending. Once this is set, it will show up automatically when you go to FILE SALES TAX.

I received a bill for GST only. How do I enter it?

Great question. And it has a very simple solution!

Go to Enter Bills > Select Vendor > Fill out top portion as usual > Choose expense account (I use the one associated with the original transaction) and use G for tax code > Enter $0 for the amount > Enter the amount of the GST into the GST (ITC) window in the bottom right hand corner

Don’t use the GST/HST Payable account. You will get a warning and this will affect your Sales Tax Returns. This is what most people tend to do!

Sometimes you’ll receive a bill that includes both GST and Duties. It’s the same basic idea:

Go to Enter Bills > Select Vendor > Fill out top portion as usual > Choose applicable expense account (ie Broker Charges) and use G for tax code > Enter amount of expense > Enter the amount of the GST in the GST (ITC) window in the bottom right hand corner

Bottom line? You can always override the GST amount in the bottom right-hand corner box.

More about GST in upcoming posts. As always, I welcome your questions!

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