In the second part of this series, we are going to look at how to prepare the Simple HST return using the quick method of accounting.
Now that you know how to calculate the amount of HST you have to remit to the government, I am going to show you how to actually put it on to your quick HST return.
The Quick HST Method Made Simple
What do we do first and foremost? As with all HST returns, we put the total amount of sales on line 101. However, since we are using the quick HST method of accounting we actually have to add the HST back to the total sales. What does that mean? We have to add $113,000 of total sales on line 101. Why is this? Because that is the total sales plus the HST.
On line 103, it’s pretty simple. $13,000 is the HST Bob collected (continued from the example in the previous article), no adjustments, therefore, on line 105, $13,000 is what’s put.
For line 106, we have to be careful because since we are using this simple HST method of accounting we don’t actually claim input tax credits on this line. However, what we do put in here is the difference between the $13,000 and the 8.8% remittance we have to give to the CRA (Canada Revenue Agency). That would be $13,000 minus $9,644, and that total amount is $3,356.
On line 108 we put in $3,356, and on line 109 we have to show how much we have to remit, and that simply is $9,644.
Lines that Don’t Apply
Line 110 and 111 are not applicable to Bob. So, on 113A we again write $9,644. And again, lines 205 and 405 don’t apply to Bob’s situation, so then, on line 113C, we write $9,644. Bob will pay $9644 of HST to the CRA, and he will get to keep $3,356.
Simple HST Method Conclusion
Thanks for going through this article. I hope you guys learnt a lot about the simple HST method and hopefully you are going to save a lot of time, money and effort in the coming years.
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.