GST/HST Simplified Method

by Holly
(Ontario)

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I am wanting to use simplified method for HST remittance - are there two separate forms - I was mailed GST34-2E. I am a new business - just opened November 2010 - first remittance due Jan 2011.


Thank You

Holly



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Hi Holly,

The simplified method of determining ITCs does not use a different form for the actual reporting of GST/HST. Only the method of calculation is different.

There is no election required to use this method but once selected, it must be used for at least one year ... if you qualify.

I'm curious why you are choosing this method over the regular GST/HST reporting method given that the revised RC4022 Guide states, "If you make purchases in both participating and non-participating provinces, you have to separate your taxable purchases based on the rate of GST/HST you paid."

Are all your purchases taxable and in Ontario?






P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.

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Dec 23, 2010
Rating
starstarstarstarstar 		Reporting Method
by: Anonymous

I was quite confused as to which method was easier to use. My stock comes from the U.S. - so I believe it best for me to use the quick method.
I am Sloooowly getting up to speed on this - only been open a little over a month!
Dec 24, 2010
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starstarstarstarstar 		Quick Method
by: Bookkeeping Essentials

Hi Holly,

There are three methods of accounting for GST/HST.

The Quick Method of accounting for GST/HST is different than the Simplified Method of reporting ITCs.

To use the Quick Method, you must file an election on Form GST74 Election and Revocation of an Election to use the Quick Method of Accounting and use the method for at least one year.

You also have to track/categorize your sales by the rate paid as your amount to remit is based on your sales not your purchases.

If you intend to keep your records for the business using a popular accounting software such as QuickBooks or Simply Accounting, then the Quick Method is not a good choice for you.

Popular accounting software programs are designed to track the actual tax. ... and there are benefits to using these programs. You can mine them for information to help you run your business.

From a bookkeeping perspective, tracking the actual tax is simpler than using the Quick Method or the Simplified Method.

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