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Accounting & Bookkeeping & Small Business Forum
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essentialaromacare
Joined: 23 Jul 2008
Posts: 1
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| Posted: Wed Jul 23, 2008 12:19 pm Post subject: GST in Ontario |
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My daughter has a graphics design business & I do her books. She has recently thought about marking up her printing costs for some additional revenue. I'm not sure how to handle this with regards to paying the GST.
When she has printing done, she pays GST, if she marks it up and charges the customer, does she charge the full GST again on the whole amount and expense the cost of the printing and claim the input tax credit? What if she doesn't mark it up? If she charges the client for the cost of printing and gets reimbursed then I guess she can't use it as an expense, can she? Does it still become part of her income if she only gets reimbursed for the actual costs? Help, confused! |
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BirchAccounting
Joined: 09 Aug 2008
Posts: 7
Location: Surrey, BC, Canada
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| Posted: Sat Aug 09, 2008 9:01 pm Post subject: RE: GST |
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Quote: When she has printing done, she pays GST, if she marks it up and charges the customer, does she charge the full GST again on the whole amount and expense the cost of the printing and claim the input tax credit?
Yes... Even if she doesn't mark it up she should still be reporting the expense(COGS) and then the income, it will result in a "NIL" but it shows the revenue/expenses properly.
Example w/markup
Purchase $50 + $2.50 GST
Sell $100 + $5.00 GST
Owe Government $2.50
Example w/o markup
Purchase $50 + $2.50 GST
Sell $50 + $2.50 GST
Owe Government NIL
Matthew & Amanda Birch
Birch Accounting & Tax Services
Surrey, BC |
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