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Canadian Income Tax Question: GST and Diesel

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Rod in Smiths F

03-14-2008 20:10:58




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I'm new at filing farm taxes. The software, Quiktax Unincorporated Business, seems reasonable and I can understand most of it. What throws me, though, is G.S.T. recovery. I keep hearing the phrase, "You get it back later," but I can't figure out how. I found one form (GST 370) for an employee of a business to claim it, but that's the only one.

The other thing is finding out how to buy untaxed diesel in relatively small quantities. I kept all of my receipts from the service station where I bought it, but I can't find a way to make a claim for the taxes.

With the kind of revenue my outfit produces, hiring an accountant would put me out of business, so I need to learn how to do this by myself.

Real advice is welcome.

Thanks,

Rod

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Chris in SK

03-15-2008 08:39:42




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 Re: Canadian Income Tax Question: GST and Diesel in reply to Rod in Smiths Falls,, 03-14-2008 20:10:58  
Most farm stores have a pump, so that you can fill a slip tank.



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Chris in SK

03-14-2008 20:49:06




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 Re: Canadian Income Tax Question: GST and Diesel in reply to Rod in Smiths Falls,, 03-14-2008 20:10:58  
Rod,
You need to be registered for GST. If you aren't and want to be, call CRA, and they'll give you a GST # and send you the forms so you can claim (or pay). For more info try www.cra.gc.ca and search for GST. For the diesel, not sure where you are, but here in SK you need to apply for the fuel tax exemption permit, and if you meet their farm size requirements they'll give you a number so you can buy farm fuel. Chris

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RodInNS

03-14-2008 20:28:01




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 Re: Canadian Income Tax Question: GST and Diesel in reply to Rod in Smiths Falls,, 03-14-2008 20:10:58  
Did you get a business number from Canada Revenue Agency? That would be the first step...
If you want to get the GST/HST back then you must be a registered business. The flip side is that you then must collect the GST on everything you do.
If you are doing more than $30000 per gross on the business you are REQUIRED to collect GST as well.... so get the business number. I'd start by looking at Canada Revenue's website.

The diesel issue is a provincial issue. I dont' know how Ontario handles that but here in NS we are required to buy a fuel permit that is good for three years. I think the permit costs something like 150 bucks so it tends to discourage small operators... but the way it works here is that once we have the permit, our supplier simply gets a copy on file and the road tax is held back at the point of sale. There is also a claim process to go through should you buy clear fuel at the pump that is claimed on an annual basis.
For what it's worth, # 2 heating oil is the same weight as #2 diesel... hint, hint...

Rod

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Rod in Smiths Falls,

03-14-2008 21:05:58




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 Re: Canadian Income Tax Question: GST and Diesel in reply to RodInNS, 03-14-2008 20:28:01  
The last furnace fuel we received cost a bit over 1.07 per litre, the same price as taxed gasoline at the service station. Go figure.

I do have the GST and PST numbers, and I found the GST/HST Return form among my files. But it only enables me to pay them money, not get a refund, as nearly as I can tell. Line 111 on this form refers to a rebate form, but the envelope did not contain such a form. None that I could find on the CRA website applied.

So it continues.

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Chris in SK

03-14-2008 22:07:01




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 Re: Canadian Income Tax Question: GST and Diesel in reply to Rod in Smiths Falls,, 03-14-2008 21:05:58  
Using the GST return form that CRA send you, you work out your calculations, total sales, GST collected, GST that you paid on expences, etc. Follow the arrow and boxes, and at the bottom of the form there are two boxes, and you'll end up with an amount in one or other. One shows the amount you may owe them, or the other shows the refund that you can claim. You then transfer this amount to the slip that you tear off on the next page and submit it. If you owe them, you send a cheque or pay it somehow. If they owe you, they'll send you a cheque when they are ready. The form that you send is called RC158. Chris

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Rod in Smiths Falls,

03-15-2008 06:12:29




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 Re: Canadian Income Tax Question: GST and Diesel in reply to Chris in SK, 03-14-2008 22:07:01  
Chris:

I looked up RC158 and called the number to get a copy of its current version personalized and printed, but I'll need to wait until business hours on Monday to get through.

Thanks for the tips, guys.

Rod



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Chris in SK

03-15-2008 08:53:59




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 Re: Canadian Income Tax Question: GST and Diesel in reply to Rod in Smiths Falls,, 03-15-2008 06:12:29  
Rod,
RC158 is just the slip that you tear off and send in. On mine its page 3 of the tax return docs that they send you. You keep page 1 for your record. First time i did mine it took me a while to figure it out. Just follow the steps on page 1. Or like Drill said, you can submit it online.
Chris



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Drill

03-14-2008 22:05:16




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 Re: Canadian Income Tax Question: GST and Diesel in reply to Rod in Smiths Falls,, 03-14-2008 21:05:58  
Rod, when you fill out the gst/pst form if your in line for a refund just fill in total with a minus(-) sign in front of it. I fill out and and return it via the web every three months with no problem, The web address is on the form.

Farmer Drill in Alberta



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dwrk

03-15-2008 06:55:02




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 Re: Canadian Income Tax Question: GST and Diesel in reply to Drill, 03-14-2008 22:05:16  
What the others said regarding the GST, regarding dyed diesel, if you can't find somebody to deliver small quantities you can get it at some truckstops, they use it in reefers. You might have to show your FBR card, haven't tried buying it there for a while. Keep in mind that if you're going to transport it in a vehicle it needs to be clearly marked as dyed diesel.



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Rod in Smiths Falls

03-15-2008 09:48:33




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 Re: Canadian Income Tax Question: GST and Diesel in reply to dwrk, 03-15-2008 06:55:02  
FBR card ????
Reefers ???

I guess I have to learn a new language here.



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dwrk

03-15-2008 10:33:29




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 Re: Canadian Income Tax Question: GST and Diesel in reply to Rod in Smiths Falls, 03-15-2008 09:48:33  
Farm Business Registration card. Your card that shows you're a farm that's eligible to get tax breaks. OFA, NFU, CFFO membership.

Truckers can't use dyed diesel in their trucks but they can in the motors that run the refrigeration units on the trailers so most truck stops have a pump for them. I have a neighbour that only uses about 100 gallons a year in his little putt-putt, that's where he gets his. Just got our yard tank filled Thursday.

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dwrk

03-15-2008 10:35:00




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 Re: Canadian Income Tax Question: GST and Diesel in reply to dwrk, 03-15-2008 10:33:29  
Come to think of it, he doesn't have an FBR card either, you're probably ok.



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