Harmonized Sales Tax (HST) is the combination of Canada’s federal goods and services tax and provincial sales tax paid by the consumer and businesses at the point of sale. The ultimate burden of the HST is transferred to the consumer. The rate of HST is 15% in all participating provinces except Ontario, where the combined rate of HST is 13%. Since HST can be filed monthly, quarterly, and annually, it is important to know the filing process. The HST filing process can be divided into 04 steps which are as follows:
4 Steps to filing an HST Using QuickBooks Online
Step 1:
The FIRST STEP is to prepare the HST return using accounting software. This will include the bookkeeping of your financial transactions for the HST filing period. Before you start the bookkeeping activity, you need to make sure that you have applied the right settings of the HST rate on HST deductible expenses in your accounting software.
In QuickBooks Online, you will run the tax agency report for a specific HST filing period so that only relevant financial transactions should appear. Based on the HST payment schedule for the CRA, QuickBooks Online automatically adds the dates of your most recent sales tax period and all you have to do is to review the lines of the sales tax return with the balance owing or the refund amount due on your current HST return.
Step 2:
The SECOND STEP is to file your HST return with the CRA. Before proceeding further with this step, you need to make sure that you have a four-digit access code. Normally, this four-digit access code is written on the electronic filing information sheet. Use your user ID and password on the CRA website and submit a return by copying the amounts from your QuickBooks Online return and pasting the data into HST return under the CRA window. Once you have transferred the sales tax data from QuickBooks Online to the CRA window, you need to close the CRA window and return to QuickBooks Online.
Step 3:
The THIRD STEP in filing your HST return is to close the sales tax period in QuickBooks Online. After closing the HST period in QuickBooks Online, you will no longer be able to add or edit any transaction for that period and then it will generate a bill for the amount owing to the CRA. You may print a copy of the HST return for your records.
Step 4:
The FOURTH and the LAST STEP in filing your HST return is to record a payment in QuickBooks Online by selecting an appropriate payment type. Select the ‘Payment’ if the number is positive and ‘Refund’ if the number is negative.
In Conclusion:
This is how easy the HST filing process is using the QuickBooks Online; all you need to ensure is that your bookkeeping should be error-free so that you may come up with correct balances to your HST return. If you find any difficulty in filing your HST return using your accounting software, please do not hesitate to reach out to us. GTA Accounting will take care of your bookkeeping data and the HST filing deadlines and we will also recommend you which HST filing method will reduce your HST payable amount based on your business nature.