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Paying GST/HST (QuickBooks 2010+)

1. From the ‘Sales Tax’ menu, choose ‘File Sales Tax’
2. Select the ‘Tax Agency’ ‘Receiver General’
3. Verify that the "From" and "To" dates are correct
4. If there is an ‘Uncategorized Tax Amount’, call us for assistance
5. If you have elected to use the Quick Method, calculate and record an adjustment per the instructions below
6. Display a Balance Sheet [Reports > Company & Financial > Balance Sheet Standard]. Change the "As of" date to the HST return-end date. Verify that the balance sheet amount for "GST/HST Payable" equals the amount on ‘Line 109 Net Tax’ (if not, call us for assistance)
7. Click ‘File Return’ > select "Paper ..." method > Continue
8. Click ‘Yes’ to print sales tax return before filing'

If there is a "Balance Owing"

• Click ‘Pay Now’ (QuickBooks creates a Vendor Accounts Payable)
• From the ‘Pay Bills’ screen click the check box to the left of the Receiver General vendor
• Change the ‘payment date’ to the period end date
• Select the ‘Assign cheque No’ radio button.
• Ensure that the correct bank 'Account' has been picked
• Click ‘Pay Selected Bills’
• Enter the cheque # in the ‘Assign Cheque Numbers’ screen, click ‘OK’, click ‘Done’. QuickBooks creates the cheque in your bank register.
• Verify that the GST/HST Payable account on the Balance Sheet is now $0 (or not showing at all).
• File the return with CRA (see Instructions below)

If there is a "Refund"

• Click ‘Receive Later’ (QuickBooks creates a Customer Accounts Receivable)
• Verify that the GST/HST Payable account on the Balance Sheet is now $0 (or not showing at all).
• File the return with CRA (see Instructions below)
  
  
• When the refund is received, go to ‘Customers’ > ‘Receive Payments’
  In the ‘Received From’ box choose the customer  ‘Receiver General – Receivable
• Enter the refund into the ‘amount’  box
• If you received refund interest, double click the ‘Orig. Amt.’ to open the ‘Make General Journal Entry’ screen.  Increase the original 'Debit' amount to the amount received. Add a new line at the bottom - account 'interest and bank charges’ and enter the difference in the Credit column, click ‘Save & Close’
• Click ‘Save and Close’

 

Quick Method adjustment

1. Quick method users only remit a portion of the GST/HST they charge to their customers. They do not claim input tax credits (ITCs) on their expenses (except for capital assets eg. furniture, computers, equipment).
2. Calculate the portion of GST/HST that you keep by multiplying line 103 by 24%. This is the adjustment amount. ([Note: an Ontario company that only charges 5% GST (ie. to a non-particating province) can keep 62% of the GST charged to those customers]
3. Click on the Sales Tax Line 104 (Adjustments)
   1. Click the "Adjust Line 104" box
   2. The adjustment account is "4100 GST simplified"
   3. Enter the adjustment amount (must be a positive number)
   4. Select "Decrease Sales Tax Line"’
   5. Click "OK"
4. Once your total sales for the year are over $30,000, you can keep an additional $300. Adjust line 104 a second time for $300 following the instructions above (do this only once per year)

 

Filing the GST/HST Return

Most banks allow GST/HST returns to be reported and paid online.  

If mailing, print the cheque, and complete Part 2 of the original CRA return with the amounts from the printout.  If there is a balance owing, enter line 113 in box 115 and include your payment with the return. If there is a refund, enter line 113 in box 114 and enter a negative sign "-" in box 109.

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Preparing QuickBooks for HST(one-time change)

You need to add two sales tax items and one sales tax code

Select Lists > Item List
New sales tax item
HST (13%) on Sales
Tax rate % = 13% (be sure to enter the % sign)
Tax Agency = “Receiver General”
Sales Tax Return Line 103
> Next
HST (13%) on Purchases
Tax rate % = 13% (be sure to enter the % sign)
Tax Agency = “Receiver General”
Sales Tax Return Line = 106
>OK

Under Lists, select Sales Tax Code List
From the bottom, select Sales Tax Code > New
Sales tax Code = H
Description = HST
Check “Taxable”
Tax Item for purchase = HST (13%) on purchase
Tax Item for sales  = HST (13%) on sales
>OK

Note: If you sell to Nova Scotia (15%) or BC (12%), you will need to set up additional items and tax codes for those provinces. Customers can be assigned a specific tax code.

Which sales tax code to use (effective July 1, 2010)
If you are doing business with a company located in Ontario, New Brunswick, or Newfoundland, use the "H" code.

If you are doing business with a company located in BC, use the BC code.

If you are doing business with a company located in Nova Scotia, use the NS code.

For all other provinces, use the "G" code (GST only)

*** QuickBooks 2007 & prior users should upgrade to QuickBooks Pro 2011