Corporate Tax Return Preparation
Corporate Tax Preparation for Businesses
Corporate tax is a complex and technical area of expertise. Our team is available to act as your corporate tax accountants helping your business with all the ins and outs of corporate tax preparation.
Many small business owners in Canada are unaware of the various deadlines for filing and payment of taxes for their corporations.
- It is important to ensure that deadlines are met in order to avoid interest and penalties.
- As your corporate tax accountants, we ensure that you file your return no later than six months after the end of each tax year.
The tax year of a corporation is its fiscal period. When the corporation’s tax year ends on the last day of the month, returns should be filed by the last day of the sixth month after the end of the tax year. If there is corporate tax income owing then payments must be made no later than three months after the end of the tax year.
We can take care of filing nil returns for inactive corporations and innovative tax planning to ensure that your corporation falls within the small business deduction limit and also that your losses are being properly carried forward or carried back so that you are paying the least amount of corporate income tax.
Our Personalized Corporate Tax Services
Choosing to work with our tax accountants for your corporate tax returns is an investment in your business’s future. If you’re ready to take advantage of expert tax preparation and planning, or if you need tailored solutions for complex financial challenges, our team is here to provide the guidance and support you need.
Corporate Tax Return (T2) Preparation
Corporate Tax Planning and Optimization
Bookkeeping Connection
Salary vs. Dividend Consideration
Income and Capital Tax Minimization
Compliance & Deadlines
Corporate Tax Checklist
Accounting Reports
- Income Statement/Profit & Loss for the fiscal year
- Balance Sheet as of the year-end date
- Trial Balance as of the year-end date
- Accounts Receivable Summary listing as of year-end
- Accounts Payable Summary listing as of year-end
- Summary of Revenue by Customer
Additional Documentation
(Fiscal Year-End Month Only)
- Bank Statements and reconciliation for all corporate accounts
- Credit Card Statements and reconciliation for all corporate accounts
- Bank Loan Statements as of the year-end date
- Mortgage Statements as of the year-end date
- HST Filings for the fiscal year
Copies of invoices for new purchases
- Equipment
- Vehicles
- Computers
- Furniture
Prior Year Documents
- Corporate Tax Return
- Notice of Assessment
By organizing these documents ahead of time, you streamline the tax preparation process and reduce the likelihood of delays or missed opportunities.
What Should a Business Look for in a Corporate Tax Accountant?
Choosing the right corporate tax accountant is not just about compliance; it’s about finding a strategic partner who can help your business thrive.
Foundational Qualifications & Credentials
In Canada, the CPA is the gold standard for accounting professionals. It ensures the individual has met rigorous education, examination, and experience requirements. Always verify they are a member in good standing with CPA Ontario.
Strategic Business Advisory & Proactive Mindset
The best accountants go beyond just filling out forms. Look for someone who acts as a strategic partner. They should proactively advise you on how to structure your business, transactions, and compensation to minimize tax legally and efficiently.
An accountant who understands the nuances of your industry can provide invaluable, tailored advice.
They should help you understand your financial statements, identify key performance indicators (KPIs), and provide insights to improve cash flow and profitability.
Specific Canadian & Ontario Tax Expertise
Tax laws are complex and multi-layered. Your accountant needs specific expertise in the Income Tax Act and be proficient in federal tax rules as well as knowledge on Ontario’s corporate tax rates and how they integrate with federal tax.
Communication & Client Service
Your Corporate tax accountant should be able to break down tax concepts and financial data into clear and concise information, empowering you to make informed decisions. Ask about their typical communication policy.
- Do they just react when you call, or do they reach out with relevant updates, tax law changes, and reminders?
- Do they use modern cloud-based accounting software and secure client portals?
- Are they comfortable with virtual meetings?
This streamlines document sharing and collaboration.
Corporate Tax Preparation FAQs
Should I hire an Accountant or can I do it myself?
While it's possible to file a T2 yourself using software, it is highly recommended to hire a professional accountant. The tax rules are complex, and a good accountant will:
- Ensure compliance and avoid penalties.
- Identify all eligible deductions and credits you might miss.
- Provide strategic tax planning to minimize your tax burden.
- Handle communications with the CRA on your behalf.
How do you find the right corporate tax accountant for you business?
- Ask for Referrals: Start with your business network, lawyer, or banker.
- Conduct Interviews: Treat this like hiring a key employee. Prepare a list of questions:
- "What experience do you have with businesses in [your industry]?"
- "Can you describe a time you helped a client like me save on taxes proactively?"
- "How do you bill for your services (e.g., fixed fee, hourly)? Can you provide an estimate?"
- "Who will be my main point of contact? Will it be you or a junior staff member?"
- "What is your process for handling CRA audits?"
- "How do you stay current with changing tax laws in Ontario and Canada?"
- Check References: Ask to speak with one or two of their current clients in a similar business.
- Trust Your Gut: You are entering a long-term, trust-based relationship. Choose someone you feel comfortable with and who demonstrates a genuine interest in your business's success.
What is the corporate tax filing deadline in Canada?
This is one of the most critical questions. The deadline is six months after the end of your corporation's fiscal year-end. For example, if your fiscal year ends on December 31st, your tax return is due by June 30th.
Corporations must pay their estimated taxes in installments, usually on a monthly or quarterly basis. The final payment for any remaining balance is due two or three months after the fiscal year-end, depending on the type of corporation.
What is the difference between a fiscal year-end and a calendar year-end
A corporation can choose any date as its fiscal year-end (e.g., March 31, June 30, September 30). It does not have to be December 31. The first fiscal period can be longer than 12 months, but no more than 53 weeks.
What business expenses can my corporation deduct?
This is a huge area of inquiry. The general rule is that an expense must be incurred to earn business income. Common deductible expenses include:
- Salaries, wages, and benefits
- Office rent and utilities
- Business insurance
- Advertising and marketing
- Meals and entertainment (generally 50% deductible)
- Vehicle expenses (based on business use percentage)
- Home office expenses (if you meet specific criteria)
- Capital Cost Allowance (CCA) - which is the tax term for depreciation
How are dividends taxed, and what is the difference between eligible and non-eligible dividends?
Dividends are a way for a corporation to distribute profits to its shareholders. The tax treatment for the shareholder depends on the type:
- Eligible Dividends: Paid from income taxed at the general corporate rate. They come with a higher "dividend tax credit" for the shareholder.
- Non-eligible (Other than Eligible) Dividends: Paid from income that benefited from the small business deduction (SBD). They come with a lower dividend tax credit. Understanding this is key for tax-efficient compensation strategies (salary vs. dividends).
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"I have trusted Ahmad and the team at A.M.I. to prepare and file my corporate and personal taxes over the past couple of years and they deserve a 5-star review! They are professional, timely, and always available for questions and advice."
"Responsive, knowledgeable and helped with some specific questions on short notice to help me make some decisions with my finances."
"Our family is very happy with Ahmad and his team. As a new client, the process was very smooth and they contacted us diligently to clarify things. Ahmad even suggested tips we never knew or thought of when we filed our taxes ourselves which benefited us greatly! Fantastic work and a very dedicated team."