Independent contractors and self-employed individuals experience certain struggles when it comes to HST filings. As you enjoy the freedom of being your own boss, understand that you must do what it takes to fulfill your tax obligations. Below are a few HST guidelines that apply to contractors and self-employed persons.
Register For An HST Account
If you’re not sure you need to register for a harmonized sales tax (HST) account, ask a qualified CPA to clarify this for you. Not every business has to register for this account. However, you can still register if you feel like you would want to claim input tax credits on the HST you paid on certain business expenses. Also, ensure you keep all the required records and support documents safely. These documents may still be required at least 6 years after the last year in which they were used.
The CRA now allows everyone to file their tax returns online. You can even find helpful resources on the CRA website such as a list of accounting software that they approve and recommend. You can even use the auto-fill feature which is available when filing returns online to fill in certain parts of your return.
Get Help When You Need It
Being self-employed can be exhausting and you might not have time to file returns on your own. You can always get help by hiring someone to do the filing on your behalf. In this case, you can appoint the person as a representative and allow them to interact with CRA on your behalf. They will need you to provide your consent before dealing with a representative for anything regarding you.
Stay On Top Of Your Tax Affairs
It’s very important to make payments to the CRA before the deadline. There are online tools and resources provided by the CRA to help you pay all the balance owed in installments and avoid falling behind such as by using pre-authorized debit. You can even create reminders which you will receive on your phone to make installment payments. This will really help you to fulfill your tax obligation and avoid penalties.
Take Advantage Of Resources Offered By CRA
When you visit the CRA website, they have a specific section for small businesses looking to file taxes. On the CRA website, you’ll find all the information you need to find out about registering for HST as well as reporting your business income and expenses. If you just started your small business, there’s a checklist that you can go over to ensure you’re tax compliant. You can also review a series of videos offered to help small businesses navigate tax issues like HST filings.
Most importantly, perform annual checkups to ensure you are up to date with the tax requirements for self-employed or independent contractors. Hire a CPA who can save you time and money in the long run by making sure you’re charging taxes correctly and claiming ITCs and ITRs to maximize your income.