charging tax? at DVinfo.net

David Schuurman · July 17th, 2008, 06:16 PM

Hi, I know many of you have to charge and pay tax because you have a registered business. But are there those that don't? And to your knowledge do I have to pay tax on a wedding that I do as I get started (no registered business) and when I do a wedding for a friend for expenses or something like that?

Any insight would help thanks.

Jon Omiatek · July 17th, 2008, 06:21 PM

Technically, yes you have to pay taxes even if you are not registered as a business. Now on the other hand, most people who do weddings for friends, do not pay taxes on cash transactions.

Douglas Thigpen · July 17th, 2008, 06:27 PM

Remember that in most states services are not taxable, only goods.

(He's refering to Sales Tax, not claiming income, which is obvious. And if you were doing it at cost, you'd just claim the gain and then write off the expense, leveling it out.)

David Schuurman · July 17th, 2008, 06:41 PM

oh ok thanks for the input, does no tax on service offered apply to ontario?

Craig Demaer · July 17th, 2008, 07:23 PM

Quote:

Originally Posted by David Schuurman

oh ok thanks for the input, does no tax on service offered apply to ontario?

Not sure about Ontario but in Manitoba I do. I'm sure Patrick or someone who works there would be able to tell you though.

Travis Cossel · July 17th, 2008, 08:12 PM

Talk to a government auditor and an accountant before you make any decisions. It's not worth risking fines and fees for doing it wrong.

Chris Davis · July 17th, 2008, 08:36 PM

First of all, you don't "charge" tax, you "collect" tax.

I don't know about where you live, but here in Minnesota we are required to collect tax on goods, not services. Now there is some debate about whether you are selling a product or a service. I had someone at our state department of revenue tell me that I should make a distinction on my invoices as to what is service and what is product - for example, if I'm charging $1,500 and delivering 5 copies on DVD, then the invoice should show a resonable amount per DVD, like $10. In that case, I'd collect tax on $50.

In my state it doesn't matter if you're a registered business: if you sell a product, you need to get a state tax ID and collect sales tax or you'll eventually be in a world of hurt.

Matthew Craggs · July 18th, 2008, 06:14 AM

In Ontario, you don't collect GST if you make under $30,000 for any four (or five, can't remember of the top of my head) consecutive quarters. Unless you go ahead and register a GST account anyway, which is not required until you hit that $30,000 amount.

PST must be paid regardless of how much money you make.

Here are a couple of good links to get you started.

http://www.rev.gov.on.ca/english/res...smallbusiness/
http://www.cra-arc.gc.ca/menu-e.html

Jon Omiatek · July 18th, 2008, 07:51 AM

in Ohio... you must collect sales tax. :(

Jason Bowers · July 18th, 2008, 07:58 AM

David,
Matt is correct, PST must be collected on all work we do in Ontario. However, if you are not planning on making a business out of this you could probably take cash and be done with it. If you take cheques it could be a different story as it will leave a paper trail.

David Schuurman · July 18th, 2008, 03:43 PM

Quote:

If you take cheques it could be a different story as it will leave a paper trail.

So if I happen to do a wedding and get paid by cheque then is there a way to submit "one of" payments where it's due? or do I have to keep track of all that and take care of it when I fill out my T4?

Steve House · July 18th, 2008, 04:10 PM

Quote:

Originally Posted by David Schuurman

So if I happen to do a wedding and get paid by cheque then is there a way to submit "one of" payments where it's due? or do I have to keep track of all that and take care of it when I fill out my T4?

GST and PST are completely separate returns from your T4. GST gets filed quarterly, don't remember about PST. Talk to an accountant as to what you need to do to get everything set up and rolling, it's not that hard - a consultation would be very inexpensive, probably even free.

Jason Bowers · July 18th, 2008, 04:12 PM

Hi David,

If you do not operate as a business and just plan on making this a side venture per se. You could potentially charge no tax and just claim the amount as extra income. Where you charge tax you will then have to submit tax to the government which will require you to register your business in order to get a PST #. If you just want the extra cash, the government will be looking to get their cut alla adding it to your income. The best bet though is to pay $100 and sit down with an accountant and ask him the questions surrounding what your future plans might be.

David Schuurman · July 18th, 2008, 04:27 PM

ok, that basically gets me what I need to know. Thanks Jason and Steve (same city! Awesome) for your specifics offered and everyone else for your input. As I do not have a business yet (not planning on it until I graduate from film school next year) I will claim it as extra income.

Jason Bowers · July 18th, 2008, 06:48 PM

You should probably ask a certified accountant though just to cover your a$$ so to speak.

July 17th, 2008, 06:16 PM	#1
David Schuurman Major Player Join Date: Jun 2008 Location: Hamilton, ON Canada Posts: 369	charging tax? Hi, I know many of you have to charge and pay tax because you have a registered business. But are there those that don't? And to your knowledge do I have to pay tax on a wedding that I do as I get started (no registered business) and when I do a wedding for a friend for expenses or something like that? Any insight would help thanks.

July 17th, 2008, 06:27 PM	#3
Douglas Thigpen Regular Crew Join Date: Jun 2008 Location: San Diego, CA / Apex, NC Posts: 81	Remember that in most states services are not taxable, only goods. (He's refering to Sales Tax, not claiming income, which is obvious. And if you were doing it at cost, you'd just claim the gain and then write off the expense, leveling it out.) __________________ Douglas Thigpen http://www.dthigpen.com/ - http://www.nicetryproductions.com/

July 17th, 2008, 08:12 PM	#6
Travis Cossel Inner Circle Join Date: Jan 2004 Location: Miami, FL Posts: 2,933	Talk to a government auditor and an accountant before you make any decisions. It's not worth risking fines and fees for doing it wrong. __________________ Black Label Films www.blacklabelweddingfilms.com

July 17th, 2008, 06:21 PM	#2
Jon Omiatek Major Player Join Date: Jan 2004 Location: Columbus, Ohio Posts: 755	Technically, yes you have to pay taxes even if you are not registered as a business. Now on the other hand, most people who do weddings for friends, do not pay taxes on cash transactions.

July 17th, 2008, 06:41 PM	#4
David Schuurman Major Player Join Date: Jun 2008 Location: Hamilton, ON Canada Posts: 369	oh ok thanks for the input, does no tax on service offered apply to ontario?

July 17th, 2008, 08:36 PM	#7
Chris Davis Trustee Join Date: Jul 2005 Location: Willmar, MN Posts: 1,400	First of all, you don't "charge" tax, you "collect" tax. I don't know about where you live, but here in Minnesota we are required to collect tax on goods, not services. Now there is some debate about whether you are selling a product or a service. I had someone at our state department of revenue tell me that I should make a distinction on my invoices as to what is service and what is product - for example, if I'm charging $1,500 and delivering 5 copies on DVD, then the invoice should show a resonable amount per DVD, like $10. In that case, I'd collect tax on $50. In my state it doesn't matter if you're a registered business: if you sell a product, you need to get a state tax ID and collect sales tax or you'll eventually be in a world of hurt.

July 18th, 2008, 06:14 AM	#8
Matthew Craggs Major Player Join Date: Nov 2006 Location: Welland, Ontario Posts: 311	In Ontario, you don't collect GST if you make under $30,000 for any four (or five, can't remember of the top of my head) consecutive quarters. Unless you go ahead and register a GST account anyway, which is not required until you hit that $30,000 amount. PST must be paid regardless of how much money you make. Here are a couple of good links to get you started. http://www.rev.gov.on.ca/english/res...smallbusiness/ http://www.cra-arc.gc.ca/menu-e.html

July 18th, 2008, 07:51 AM	#9
Jon Omiatek Major Player Join Date: Jan 2004 Location: Columbus, Ohio Posts: 755	in Ohio... you must collect sales tax. :(

July 18th, 2008, 07:58 AM	#10
Jason Bowers Major Player Join Date: Feb 2005 Location: Thunder Bay, ON. Canada Posts: 374	David, Matt is correct, PST must be collected on all work we do in Ontario. However, if you are not planning on making a business out of this you could probably take cash and be done with it. If you take cheques it could be a different story as it will leave a paper trail.

July 18th, 2008, 04:12 PM	#13
Jason Bowers Major Player Join Date: Feb 2005 Location: Thunder Bay, ON. Canada Posts: 374	Hi David, If you do not operate as a business and just plan on making this a side venture per se. You could potentially charge no tax and just claim the amount as extra income. Where you charge tax you will then have to submit tax to the government which will require you to register your business in order to get a PST #. If you just want the extra cash, the government will be looking to get their cut alla adding it to your income. The best bet though is to pay $100 and sit down with an accountant and ask him the questions surrounding what your future plans might be.

July 18th, 2008, 04:27 PM	#14
David Schuurman Major Player Join Date: Jun 2008 Location: Hamilton, ON Canada Posts: 369	ok, that basically gets me what I need to know. Thanks Jason and Steve (same city! Awesome) for your specifics offered and everyone else for your input. As I do not have a business yet (not planning on it until I graduate from film school next year) I will claim it as extra income.

July 18th, 2008, 06:48 PM	#15
Jason Bowers Major Player Join Date: Feb 2005 Location: Thunder Bay, ON. Canada Posts: 374	You should probably ask a certified accountant though just to cover your a$$ so to speak.