Filing corporate taxes in Canada can be a complex process, but with the right information and preparation, it can be a smooth process. Here are the steps to prepare and file corporate tax in Canada:
Step 1: Gather all the necessary documents
Before filing your taxes, you need to gather all the necessary documents such as financial statements, receipts, invoices, and other supporting documents. You can use a tax checklist to make sure you have all your information in one place, which will make filing taxes fast and accurate.
Step 2: Determine your tax filing obligations
You need to determine your tax filing obligations and income tax status in Canada. If you are a resident of Canada for income tax purposes, you’ll need to file tax returns for any tax year in which you have to pay taxes.
Step 3: Choose how you want to file your taxes
You can file your taxes online or by paper, or find other options such as having someone else complete them for you. Options include:
- NETFILE-certified tax software (electronic filing)
- Through a tax preparer using EFILE-certified tax software (electronic filing)
- Paper tax return
- Automated phone line (by invitation only)
Step 4: File your taxes
You can file your taxes online or by mail. If you want to mail your tax return, request a copy of the paper filing package from the CRA. If you want to file your taxes online, create an account with a tax preparation tool like TurboTax but better to contact a professional tax accountant like BOMCAS Canada. If you’d prefer to hire an accountant, ask for an appointment at 780-667-5250.
Step 5: Pay any taxes owed
If you owe income tax, you must pay it by the deadline for the previous tax year. If you are employed in Canada, your employer must withhold and remit to the CRA statutory deductions from your wages.
Step 6: Keep your CRA information up-to-date
Update your CRA information such as your address, marital status, name, or other personal information with the CRA. Register for direct deposit and keep it up-to-date to get your payments and refunds faster.
Frequently Asked Questions
Do you have to file a corporate tax return?
Yes, corporations in Canada are required to file a corporate tax return every year, even if they have no income to report.
What documents are required to file corporate taxes in Canada?
To file corporate taxes in Canada, you need to gather all the necessary documents such as financial statements, receipts, invoices, and other supporting documents. The documents required vary depending on the corporation, but the following are a good place to start the gathering process:
- Financial statements (income statement, balance sheet, cash flow statement)
- General ledger
- Bank statements
- Accounts receivable and payable
- Payroll records
- Capital asset additions and disposals
- Shareholder information
- Tax returns from previous years
How to obtain a T2 Corporation Income Tax Return form?
You can obtain a T2 Corporation Income Tax Return form from the Canada Revenue Agency (CRA) website or by calling the CRA at 1-800-959-5525. You can also use tax preparation software like TurboTax to file your corporate taxes online.
What happens if I don’t file my corporate taxes?
If you don’t file your corporate taxes, you may face penalties and interest charges. The CRA may also take legal action to collect the taxes owed. It is important to file your taxes accurately and on time to avoid penalties and interest charges.
What if I make a mistake on my corporate tax return?
If you make a mistake on your corporate tax return, you can correct it by filing an adjustment request with the CRA. You can do this online using the CRA’s My Business Account service or by mail. It is important to correct any mistakes as soon as possible to avoid penalties and interest charges.
How long do I need to keep my corporate tax records?
It is important to keep all receipts and documents for at least six years after you file your return as the CRA may request a review.
What are the tax rates for corporations in Canada?
The federal corporate tax rate in Canada is 15%. However, the combined federal and provincial tax rates vary by province and territory. You can find the current tax rates on the CRA website. Filing corporate taxes in Canada can be a complex process, but with the right information and preparation, it can be a smooth process. It is important to ensure that you file your taxes accurately and on time to avoid penalties and interest charges.
Additional resources or help with your corporate tax please contact BOMCAS Canada
Accounting firm Canada – Small Business Accountant & Tax Service – BOMCAS Canada
