# sole proprietorship - simple questions



## hedgehog12 (Feb 28, 2011)

I don't know if this is the right place for them, but these are some taxation questions that I've been wondering about:

I started a small business last year (2011 - I live in BC) as a sole proprietorship and paid $40 something for a Business License. I also applied for a GST/HST account which was granted to me by the CRA.

This year however (2012), I did virtually *no *business since I went to school full-time and my schedule has been more compressed than usual.

I have several questions:

*1)* Does my business Licence expire? Do I have to renew it annually (pay $40 again)? 

*2)	*How about the GST/HST account?

I did not do any business, do I still have to file a T2125 (I forked out $150 extra last year for a tax service to do this, they told me it’s cuz I have a business)
*
3)* Do I still have to file the T2125 yearly? 

Thanks!


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## mind_business (Sep 24, 2011)

hedgehog12 said:


> *2)	*How about the GST/HST account?
> 
> I did not do any business, do I still have to file a T2125 (I forked out $150 extra last year for a tax service to do this, they told me it’s cuz I have a business)


Yes, but only because you have a registered GST/HST account. Depending on how much you previously made in a year, you may have received bad advice to set one up. If you always made less than $30,000 in a calendar year, then you did not have to collect/remit GST/HST ... there are some exceptions, but that is the general idea. If you had made more the $30,000, then you likely needed to set one up.



hedgehog12 said:


> *3)* Do I still have to file the T2125 yearly?


Yes, because of the reason given above.

To better understand under what conditions a business doesn't need to get a GST/HST account, and therefore does not have to collect the tax, read this: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/rgstrng/smllspplrclc-eng.html

You were likely set up under the 'Voluntary Registration' rules. Here's why you have to file anually, even though you didn't make any money:

Quote: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/rgstrng/vlntry-eng.html
If you decide to register voluntarily:
• you have to charge, collect, and remit GST/HST on your sales of taxable goods and services. You will also have to file GST/HST returns on a regular basis; and
• you have to stay registered for at least one year before you can cancel your registration (unless you stop your commercial activities).


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## kcowan (Jul 1, 2010)

You will find the the GST department owes you money. Your input credits still apply and you get no revenue liability. When I ceased operations, I continued to claims credits until I was able to cancel my registration. The business license depends on the type of business registered.


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## hedgehog12 (Feb 28, 2011)

Merry Christmas everyone!!

Oh no! I don't anticipate making much in fiscal 2013 (I'll be in school for most of it as well). 

How did u guys cancel the GST/HST account??
Thanks



mind_business said:


> Yes, but only because you have a registered GST/HST account. Depending on how much you previously made in a year, you may have received bad advice to set one up. If you always made less than $30,000 in a calendar year, then you did not have to collect/remit GST/HST ... there are some exceptions, but that is the general idea. If you had made more the $30,000, then you likely needed to set one up. [/COLOR]


$150 per year for a T2125 to the tax firm hurts (not a small sum to me). It's probably too late to cancel the GST/HST account for 2013 isn't it? Sorry I'm starting to panic and thinking I did get bad advice (or was duped). My business makes nowhere near $30k per year. In fact, not even make half of that in 2011. So I really don't need this GST/HST account.


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## mind_business (Sep 24, 2011)

Quote: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/bspsbch/cncllng/menu-eng.html
To close your GST/HST account you will need to complete Form RC145, Request to Close Business Number (BN) Program Accounts and send it to your tax center or call the Business enquiries at 1-800-959-5525.

Quote: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/bspsbch/cncllng/smll_sp_slprp-eng.html
If you are registered and your total taxable revenues fall below the Small supplier limit calculation amount you may decide to deregister (close) your GST/HST account. If this is the case, you must have been registered for at least one full year before we will close your account.


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## mind_business (Sep 24, 2011)

Btw, I phoned the 1-800 number.


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## Spudd (Oct 11, 2011)

hedgehog12 said:


> $150 per year for a T2125 to the tax firm hurts (not a small sum to me).


The T2125 is one of the forms supported by UFile, which costs $20. I would recommend just getting that and doing the taxes yourself instead of paying to have them done.


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## iherald (Apr 18, 2009)

Studiotax, which is free, has the T2125 as well.


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## james4beach (Nov 15, 2012)

The T2125 itself isn't a big deal. As others have mentioned, you can use standard tax filing software. I used Future Tax for mine and it was pretty smooth.

If you have discontinued all your small business operations, there's a box on there you can tick to indicate that. Also keep in mind you may have capital items that carry forward from year to year, that should show up on the T2125 (undepreciated capital costs, UCC).


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## hedgehog12 (Feb 28, 2011)

I have a capital loss lol, so I shouldn't have to pay anything more or report stuff.

I have decided to cancel my GST/HST account. I really didn't need it in the first place, and it'll save me unnecessary paperwork. Thanks for your input everyone!


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