Supporting a Kickstarter project: Should a customer's pledge payment include sales tax, e.g. GST/HST in Canada?
You can only claim an input tax credit if tax was actually collected by the seller, irrespective of whether it should have been or not. You need to contact the seller to request an invoice that shows the GST/HST, if any, as well as the seller's GST/HST number, which is required to be printed on invoices. If the seller is not including GST/HST in the prices indicated on Kickstarter, I would like to know how they get away with that!
The rounding should always follow the same rule. If the value ends in .01 or .02 then you round to .00. Doesn't matter if it's 10.01 rounding to 10.00 or 0.01 to 0.00. The decision on what a company wants to do if an invoice total is $0.01 or $0.02 would be up to the company. The POS system should follow the rule and round to $0.00 if the method of payment is cash, but the company has the right to not give things away for free.  They can impose a minimum cash invoice amount of $0.05. But you would do this by requiring the customer to add more items to their purchase. You couldn't just round the invoice up to $0.05 and to charge them $0.05 for a $0.01 item It would be similar to companies having a minimum purchase amount when paying by credit card. If their minimum amount is $10.00 and you want to buy something that's $5.00, you either pay cash or add something to your order. They don't just charge you $10.00 for your $5.00 item. I think this would be a extreme edge case where you have an invoice with a total of $0.01 or $0.02, without any discounts, partial payments, etc. If the customer's total was $10.01 and they paid with a $10.00 gift card, the final amount owing of $0.01 would round down to $0.00 and they wouldn't owe any more. If they had paid cash, the total would have rounded to $10.00 anyway.  Similarly, if the customer returned an item and bought a new item, or used coupons, and the total owing was $0.01 or $0.02, then you would round down to $0.00 and they wouldn't pay anything. As BobbyScon said, you can implement some options to allow the company to decide how they want to handle this. You could have an option that doesn't allow a sale to be processed if the total amount is less than $0.03 and the sale doesn't include any discounts, returned items, coupons, etc. The option could be to completely block the sale, require a supervisor override, or just display a warning to the cashier. Best bet is to talk to as many of your current or potential clients as you can to see how they would like this edge case handled. For many, it's probably a mute case since they wouldn't have items that have a unit price less than $0.03. Maybe a place like a hardware store that sells individual nuts, bolts, and washers. First off, the basics on HST/GST:   You don't need to collect HST, if you don't want to, until you hit 30k in a particular three month period (assuming you're not regularly passing $30k).  You then need to collect on the sale that takes you over $30k plus all sales after that.  See the H&R Block page on GST/HST for example: [B]usiness goes through the roof, generating more than $30,000 in one particular three-month period. In this case, the day the sale goes through that took you over that $30,000 threshold becomes the day you cease to be a small supplier. You must charge GST/HST on the sale that put you over the $30,000 limit, and on all sales after that, even if you are not yet registered. You now have 29 days to register with the government. Alternately, if you hit 30k over four three-month periods (i.e., a year), then you are exempt until the end of that fourth three-month period, after which you must register and collect HST the month after: [R]evenues in excess of $30,000 during four (or fewer) previous, consecutive three-month periods. You will be considered to be a small supplier for those four calendar three-month periods, plus the next month. Your first sale after that additional month, and all sales thereafter, will have to include GST/HST. You will have 29 days from the first day of the second month to register. However, many businesses do collect HST/GST even under that limit, in particular as it means you can collect tax refunds for your input HST/GST paid.  If you do so, then you simply register from the start, and then you don't need to worry about it.  You do need to remit those taxes collected, though.  If you don't remit, you won't be able to collect tax rebates for your input HST/GST. You decide to become a GST/HST registrant when you start your business. You expect to exceed the $30,000 threshold at some time in the near future. You also want to receive any GST/HST paid back from the government on all expenditures especially those high startup costs. And, as Grant Thornton recommends: In most cases, it’s generally a good idea to register for GST/HST as soon as your business is established. Provided that your business makes (or will make) taxable or zero-rated supplies, early registration ensures that GST/HST paid on costs incurred is recoverable since tax paid prior to registration is generally not recoverable except on the purchase of inventory, capital property and prepaid services still on hand at the time of registration. Be sure to register early because, in many situations, registering late can result in the loss of recoverable GST paid before registration. I would be inclined to back the 'tip jar' weblink idea, this is very prolific within the Twitch community, as a method of tipping and thereby supporting content creators. I know that there are numerous tutorials on how to set up 'tip' sites for such usage, so that may point you in the right direction. Also you could turn to crowd-funding opportunities, such as Kickstarter and others, however I am not sure on the ruling of these companies and whether you have to offer the completed project as a reward for backers (it tends to be the done thing). And depending on how serious your friends are in helping you as a fledgeling indie developer, you could investigate in setting yourself up as a limited business. This would allow your supporters to purchase shares in your business, turning them into true stakeholders, but whilst retaining the limited status of the company. However, I must stress, on this point I know very little and may be wrong (I am actually hoping someone else contradicts this so I can learn). "when you contribute to a 401k, you get to invest pre-tax money. that means part of it (e.g. 25%) is money you would otherwise have to pay in taxes (deferred money) and the rest (e.g. 75%) is money you could otherwise invest (base money).  growth in the 401k is essentially tax free because the taxes on the growth of the base money are paid for  by the growth in the deferred portion.  that is of course assuming the same marginal tax rate both now and when you withdraw the money. if your marginal tax rate is lower in retirement than it is now, you would save even more money using a traditional 401k or ira. an alternative is to invest in a roth account (401k or ira). in which case the money goes in after tax and the growth is untaxed.  this would be advantageous if you expect to have a higher marginal tax rate during retirement. moreover, it reduces tax risk, which could give you peace of mind considering u.s. marginal tax rates were over 90% in the 1940's. a roth could also be advantageous if you hit the contribution limits since the contributions are after-tax and therefore more valuable. lastly, contributions to a roth account can be withdrawn at any time tax and penalty free. however, the growth in a roth account is basically stuck there until you turn 60. unlike a traditional ira/401k where you can take early retirement with a SEPP plan. another alternative is to invest the money in a normal taxed account.  the advantage of this approach is that the money is available to you whenever you need it rather than waiting until you retire.  also, investment losses can be deducted from earned income (e.g. 15-25%), while gains can be taxed at the long term capital gains rate (e.g. 0-15%). the upshot being that even if you make money over the course of several years, you can actually realize negative taxes by taking gains and losses in different tax years. finally, when you decide to retire you might end up paying 0% taxes on your long term capital gains if your income is low enough (currently ~50k$/yr for a single person). the biggest limitation of this strategy is that losses are limited to 3k$ per year. also, this strategy works best when you invest in individual stocks rather than mutual funds, increasing volatility (aka risk). lastly, this makes filing your taxes more complicated since you need to report every purchase and sale and watch out for the ""wash sale"" rules. side note: you should contribute enough to get all the 401k matching your employer offers.  even if you cash out the whole account when you want the money, the matching (typically 50%-200%) should exceed the 10% early withdrawal penalty." Not doing this would defeat the entire purpose of a VAT. The reason for a VAT rather than a simple sales tax is that it's harder to evade. Having a simple sales tax with the type of rates that VAT taxes typically are is unworkable because evasion is too easy. Imagine I'm a retailer. I buy products from a wholesaler and sell them to consumers. With a sales tax, if I don't charge the customer sales tax, the customer is happy and I don't care (assuming I don't get caught). And if I keep the sales tax but don't report the sale, I make a lot of money. Now, imagine a VAT. If I don't charge the customer the VAT, I lose money since I paid the VAT on the wholesale products. And if I don't report the sale, how do I claim my VAT refund? "The relevant IRS publication is 526, Charitable Contributions. The section titled ""Contributions you cannot deduct"" begins on page 6; item 4 reads: ""The value of your time or services."" I read that to mean that, if the website you built were a product, you could deduct its value. I don't understand the legal distinction between goods and services I originally said that I believe that a website is considered a service. Whether a website is a service or a product appears to be much more controversial that I originally thought. I cannot find a clear answer. I'm told that the IRS has a phone number you can call for rulings on this type of question. I've never had to use it, so I don't know how helpful it is. The best I can come up with is the Instructions for Form 1120s, the table titled ""Principal Business Activity Codes,"" starting on page 39. That table suggests to me that the IRS defines things based on what type of business you are in. Everything I can find in that table that a website could plausibly fall under has the word ""service"" in its name. I don't really feel like that's a definitive answer, though.  Almost as an afterthought, if you were able to deduct the value of the website, you would have to subtract off whatever the value of the advertisement is. You said that it's not much, but there's probably a simple way of estimating that." The relevant page of the CRA's 2016 General Income Tax and Benefit Guide explains how to donate money to the federal debt servicing and reduction account. The guide writes: To make a gift to this account, make it payable to the Receiver General, and send it with a note asking that we apply it to this account, to: Place du Portage   Phase III, 11 Laurier Street   Gatineau, Quebec   K1A 0S5 Donations are tax-deductible: they'll send you a tax receipt. "The difference between the provincial/territorial low and high corporate income tax rates is clear if you read through the page you linked: Lower rate The lower rate applies to the income eligible for the federal small   business deduction. One component of the small business deduction is   the business limit. Some provinces or territories choose to use the   federal business limit. Others establish their own business limit. Higher rate The higher rate applies to all other income.    [emphasis mine] Essentially, you pay the lower rate only if your income qualifies for the federal small business deduction (SBD).  If you then followed the small business deduction link in the same page, you'd find the SBD page describing ""active business income"" from a business carried on in Canada as qualifying for the small business deduction.  If your corporation is an investment vehicle realizing passive investment income, generally that isn't considered ""active business income."" Determining if your business qualifies for the SBD isn't trivial — it depends on the nature of your business and the kind and amount of income it generates.  Talk to a qualified corporate tax accountant. If you're looking at doing IT contracting, also pay close attention to the definition of ""personal services business"", which wouldn't qualify for the SBD.  Your accountant should be able to advise you how best to conduct your business in order to qualify for the SBD.  Don't have a good accountant?  Get one.  I wouldn't operate as an incorporated IT contractor without one. I'll also note that the federal rate you would pay would also differ based on whether or not you qualified for the SBD.  (15% if you didn't qualify, vs. 11% if you qualify.)   The combined corporate income tax rate for a Canadian-controlled private corporation in Ontario that does qualify for the small business deduction would be 11% + 4.5% = 15.5% (in 2013). Additional reading:"