Turbotax: Changing Fiscal Year For GST.HST

 

*** 
Relevant Material: Changing your GST/HST fiscal year has significant implications for your filing deadlines and potentially your reporting frequency, and requires formal notification to the Canada Revenue Agency (CRA). While the change is primarily managed through the CRA, its consequences must be accounted for when using tax software like TurboTax to prepare your returns. 

Significance of Changing Your GST/HST Fiscal Year
  • Determines Deadlines: Your fiscal year-end date dictates when your GST/HST returns are due. A change means new deadlines for filing and payment, and you will need to file a "stub period" return to cover the period between the old and new year-ends.
  • Impacts Filing Frequency (Potentially): The CRA assigns your filing frequency (monthly, quarterly, or annually) based on your total revenue and fiscal year. While changing the year-end doesn't automatically change the frequency, your new fiscal year's revenue may place you in a different bracket for subsequent years.
  • Instalment Requirements: If your annual net tax is $3,000 or more, you are generally required to pay quarterly instalments. A change in fiscal year will affect the calculation and due dates of these instalments.
  • Accounting Complexity: For simplicity and ease of accounting, it is often recommended to align your GST/HST fiscal year with your income tax year-end. Having different year-ends can create more work for you or your accountant.
  • CRA Approval: You must elect or revoke an election to change your fiscal year with the CRA. The election must stay in effect for at least one year. 
How the Change Affects TurboTax
TurboTax is primarily a tool for preparing your tax returns based on the information you provide. The software itself does not change your official fiscal year with the CRA, but you must ensure the information within it aligns with your new, officially registered fiscal period. 
  • Manual Update Required: The change of fiscal year is managed through your CRA My Business Account (by filing Form GST70, or online), not within the TurboTax software itself.
  • Inputting Correct Dates: When using TurboTax for Business or self-employed income, you must ensure you enter the correct new fiscal year dates for the reporting period you are filing.
  • Filing "Stub Period" Returns: For the transition period (the "stub period" between the old and new year-ends), you will need to prepare a return covering that shorter timeframe, which TurboTax should accommodate when you input the correct start and end dates.
  • Adjusting Previous Returns: If you realize you used the wrong fiscal year for a previously filed return, you can use the ReFILE service within TurboTax Online, or the "Adjust a return" feature in your CRA My Business Account, to make corrections. 
Action Steps
  1. Notify the CRA: Change your GST/HST fiscal year formally online via My Business Account or by mailing Form GST70, Election or Revocation of an Election to Change a GST/HST Fiscal Year, to your tax centre. This must be done on or before the day the change becomes effective.
  2. Confirm the Change: Check your CRA account online to confirm the new effective date and reporting frequency.
  3. Use TurboTax Accordingly: When preparing future GST/HST returns in TurboTax, ensure the reporting period entered matches your new, approved fiscal year. .. (Google) 
*** 
Relevant Material: Changing your fiscal year in QuickBooks has significant implications for your GST/HST reporting, requiring prior approval from the Canada Revenue Agency (CRA) and alignment of both your accounting software and tax agency settings. 
Significance for GST/HST Reporting
The primary significance of changing your fiscal year on your GST/HST is regulatory compliance: 
  • CRA Approval is Mandatory: You cannot simply change your fiscal year in QuickBooks and start filing with a new period. You must request and receive approval from the CRA before the first day of the new fiscal year for the related accounting periods.
  • Alignment of Periods: Your GST/HST reporting periods (monthly, quarterly, or annually) are determined by your annual taxable supplies, but they must align with the fiscal year you have registered with the CRA. Changing one without the other will cause discrepancies in your filings.
  • Impact on Reporting Frequency: If your business growth has triggered a mandatory change in filing frequency (e.g., from annual to quarterly because taxable supplies exceeded $1.5 million), this also needs to be correctly updated with the CRA and in QuickBooks.
  • Data Integrity: Changing the fiscal year in QuickBooks affects how new reports and budgets are generated, but it doesn't automatically change historical data. You will need to manually adjust date parameters for historical comparisons or access prior year information, which is critical for accurate GST/HST audit trails. 
Steps and Considerations
Here are the general steps and considerations, which should be performed in consultation with a professional accountant or tax advisor: 
  1. Consult with a Professional: Due to the potential impact on tax filings and financial statements, it is highly recommended to consult with an accountant to ensure a seamless transition and compliance.
  2. Obtain CRA Approval: Submit a request to the CRA online via My Business Account or by mail using Form GST71.
  3. Back up QuickBooks Data: Before making any changes in your accounting software, create a complete backup of your company file.
  4. Update QuickBooks Settings: Once CRA approval is secured, update the fiscal year start month in your QuickBooks settings:
    • QuickBooks Online: Go to Settings ⚙ > Account and settings > Advanced tab, then in the Accounting section, select the pencil icon to change the "First month of financial year".
    • QuickBooks Desktop: Go to the Company menu > Company Information (or My Company > Manage your account) and change the "First month of fiscal year".
  5. Adjust Sales Tax Periods: Ensure that the sales tax filing frequency and periods in QuickBooks are updated to match the new fiscal year and CRA requirements.
  6. Review and Reconcile: Carefully review and reconcile all accounts and generate new reports to ensure everything aligns with the new fiscal year. It is also helpful to use the "Close the books" feature to lock financial data up to the end of the previous period, preventing accidental changes. .. (Google) 
*** 

  • App Support Site: https://tekk-savvy.com

    Book: https://www.amazon.com/dp/B08835PX1P 3D Print Shop: https://www.shapeways.com/shops/tekksavvy Blog: https://jotformk.wixsite.com/ncyclopedia Hand Made Products Shop: https://www.etsy.com/ca/shop/Tekksavvy Blogger: https://www.blogger.com/profile/07524401563605547321 Shopify shop: https://tekks-shop.myshopify.com Ringtones: https://www.zedge.net/profiles/357e11a5-25fb-4415-9a6a-7da2239c2aba/ringtones Beats: https://airbit.com/share/Tekksavvy/bull-market-mp3 Excel Templates & Calculators: https://youtu.be/-8XdrnnlNuE
    Tax Calculators: https://youtu.be/bzq9D0fccqE

    Skype ID: ptlb0142_1



    Skip The Dishes Courier: Referral Code: 6S69IH
    Uber Eats Driver: Referral: ubaidp147ue
    Instacart Shopper - Referral Code: TSAVVY9010D
    Poparide Referral Link: https://www.poparide.com/r/ubaidp
    Lending Loop Referral Code: 42a

  • Referral Code (Wealth simple): Hey! Join me on Wealth simple and get $25 when you fund any account with my referral link (https://wealthsimple.com/invite/LLV6BG ) or code LLV6BG 
    • Referral Link (Coinbase): Hey! Join me on Coinbase and receive $30 (CAD) in BTC for the first trade over $30 with my referral link  (https://coinbase.com/join/VBS2C2Z?src=ios-link)

    Referral Link (CIBC): 
    Refer and earn cash: Refer a friend and you’ll both earn $50† Refer up to 50 friends each calendar year. Qualifying actions apply†https://www.cibconline.cibc.com/ebm-resources/public/cibc-referral-app/client/index.html#/welcome?locale=en&xref=1111711161520965663

    Comments

    Post a Comment

    Popular posts from this blog

    TurboTax: Social Assistance (T5007) & UCCB

    Image
    TurboTax: Social Assistance & UCCB *** Q: How do one report UCCB and social assistance on their tax return? Who claims these amounts on a joint return? A: As shown in the video... ***  Step 1: Fill in the personal dialog box for both individuals in the relationship... Step 2: Fill in the social Assistance amount in box 11 of T5007. Step 3: Fill in UCCB amounts in box 10 of RC62... Step 4: Declare any employment amount in Box 14 of T4. Step 5: Declare any self-employment amount on T2125 and other income on T4A. Step 6: Check line 145 on T1 General for both individuals to figure out the individual claiming the social assistance amount. Step 7: Check Line 117 on T1 General for the Individual claiming UCCB on RC62. Step 8: Make sure the employment income on Line 101 matches box 14 of T4 for the individual who is employed **  Relevant Material :  " The   T5007 slip (Statement of Benefits)   is a significant Canadian tax document used to report   workers' ...
    Read more

    TurboTax: Foreign Income Verification Statement (Form T1135)

    Image
      Q: How does one access and use Foreign Income Verification Statement? How does one declare foreign Income? How does one switch between detailed and simplified reporting for T1135? A: As shown in the video... *** Relevant Background : " In Canada, the   Foreign Income Verification Statement (Form T1135)   is a mandatory disclosure document for residents who own "specified foreign property" with a total cost exceeding   CAD $100,000   at any time during the tax year. Its significance lies in enhancing tax transparency and ensuring that worldwide income is accurately reported to the Canada Revenue Agency (CRA).   1. Core Objectives The statement serves several regulatory and compliance purposes for the CRA:   Verification of Global Income:  It allows the CRA to cross-reference reported foreign assets with the income (dividends, interest, rental income) declared on an individual's tax return. Combating Tax Evasion:  By tracking offshore wealth,...
    Read more

    TurboTax: Line 303

    Image
      * ** Relevant Material :  On a Canadian tax return,   Line 303   (now officially   Line 30300 )   refers to the  Spouse or Common-Law Partner Amount . This is a non-refundable tax credit used to reduce the federal tax you owe.   Significance of the Line Line 30300 is significant because it allows a taxpayer to claim a credit for supporting a spouse or partner who has little to no income.   Eligibility:  You can claim this amount if you supported a spouse or common-law partner at any time during the year and their net income (from Line 23600) was less than your basic personal amount. Income Thresholds (2024/2025): For the 2024 tax year, the maximum spousal amount is  $15,705 . If your partner has income, the credit is reduced dollar-for-dollar by their net income. Caregiver Addition:  If your spouse or partner has a physical or mental impairment, you may be entitled to an additional  $2,616  through the  Canada ...
    Read more