Author Topic: Sole proprietor making less than $30k a year - can I stop charging tax?  (Read 2779 times)

lifejoy

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I believe I was told by an accountant that I only need to start charging GST and PST once I was making $30k/year. I was feeling ambitious and wanted to learn the ropes so I registered for PST and GST and have been charging it. However, as this is my side-hustle, I am not making that much money (not even close) and am wondering if it's possible to go back to a situation where I can stop charging and reporting GST/PST.

Thanks in advance for any suggestions!

Mighty Eyebrows

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I believe I was told by an accountant that I only need to start charging GST and PST once I was making $30k/year. I was feeling ambitious and wanted to learn the ropes so I registered for PST and GST and have been charging it. However, as this is my side-hustle, I am not making that much money (not even close) and am wondering if it's possible to go back to a situation where I can stop charging and reporting GST/PST.

Thanks in advance for any suggestions!
I can't give any PST advice, but it looks like you can stop collecting GST if you fall under the limits:

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/account-close.html

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/when-register-charge.html

Whether you actually want to do it would depend on if you have many GST-paid expenses that you can claim back. If you are consistently charging more GST than you are paying as a business, then de-registering might be a decent idea. I don't know if there are other considerations, though.


lifejoy

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Thanks so much for your response! This helps me have a place to start looking into this.

Goldielocks

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Be careful and double check.  At the very least you need to notify that the GST account is being cancelled. 
I had thought that generally, once you start tracking / collecting GST you needed to continue.

Mighty Eyebrows

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I had thought that generally, once you start tracking / collecting GST you needed to continue.
I wondered the same thing, but the first link I posted has a clear protocol for closing a GST account.

lifejoy

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Re: Sole proprietor making less than $30k a year - can I stop charging tax?
« Reply #5 on: November 25, 2020, 03:08:49 PM »
Thanks for helping me out you guys! This is going to save me time in the long run.