Setting up HST

laila

I'm a new business owner in Ontario and am a bit confused about setting up the sales tax in Wave. Should I be creating two sales taxes? One for HST charged to clients that's used for invoices and a second one for HST paid for products that's applied to receipts for products bought for the business? I've also received conflicting information about which would be recoverable and which would not be. Any advice from fellow Ontario business owners would be much appreciated. Thanks in advance.

Ryan_W

Hey @laila the HST can be a single tax for both sales and purchases, and you just apply the tax to each type of transaction as needed.

As for determining what's recoverable, it depends what you want to do with the totals you earn in HST/amounts you've paid out in HST for purchases. Marking it as recoverable simply means that the Sales Tax Report will generate the totals in Sales/Purchases, while leaving it as non-recoverable means you're basically saying "eh, I don't really care what those totals are, so I'm going to tell Wave not to bother calculating/keeping track of them".

That said, depending on your reporting requirements, expected income, etc., it's always a good idea to check in with a tax advisor (I'm just letting you know what it means under the hood in Wave). Hope that gives you a bit of helpful context!