Whether you are an independent freelancer, the director of a corporation or somewhere in between, you can file your business tax returns online, and QuickBooks can help. Accounting software keeps your financial details organized throughout the year, but it also streamlines tax time. The right software combined with internet filing can help eliminate mistakes and save time.
Income Tax Returns
As a small business owner, you have to submit Form T2125 (Statement of Business and Professional Activities) along with your T1 general income tax return. If you are filing income taxes on behalf of a corporation, you need to file a T2 for Canadian corporation taxes. In both of these cases, you need details about your revenue, business expenses, and capital assets, and all of that information should be in your accounting software.
You can open your QuickBooks online account and your tax preparation software at the same time, and you can manually transfer details from one to the other. If you use tax preparation software that is compatible with QuickBooks, such as TurboTax Business, you can instantly port the information from your accounting records to your tax forms. This eliminates mistakes due to manual entry, and it speeds up the process.
QuickBooks can also help with payroll. If you have employees, you have to remit Canada Pension Plan contributions, Employment Insurance premiums and income taxes on their behalf. The payroll functions in QuickBooks calculate these amounts every time the software drafts a cheque for one of your employees.
Additionally, the software tracks these deductions and generates PD7A forms, which you need to remit payroll taxes. To submit this information to the government, you simply hop on the CRA’s website to file a return, choose file by internet transfer and select your payroll form from the list of saved files on your computer.
QuickBooks can help you create other frequently used tax forms, such as records of employment and T4 slips for your employees, so they can complete their own tax returns. With internet filing, you don’t have to worry about driving to the post office, standing in line or enduring long waits. Instead, you can take care of matters from virtually anywhere that you have access to the internet.
Goods and Services Tax
If you sell taxable goods or services, you likely collect goods and services tax from your clients. Depending on where you live, you may have to collect provincial sales tax or harmonized sales tax, which is an amalgamation of GST and PST.
QuickBooks can help with these tax obligations as well. The software can automatically calculate sales tax payments based on where you do business, the type of goods or services you sell, and the amount of each transaction. Then, the software creates a report with the information you need to pay your sales tax online through My Business Account.