Corporate tax accountant for Mission corporations

For a one-owner Mission corporation, bookkeeping, payroll and the year-end T2 corporate tax return with statements usually cost $500 to $700 a month all-in. That covers Schedules 1 and 50, CCA, the small business deduction, the owner’s T4 or T5 slips and next year’s instalments.

Class selection is a rate decision

The wrong capital cost allowance class changes a machine’s deduction rate for its whole life. Class 8 (20% declining balance) covers general equipment and furniture. Class 10 (30%) general-purpose vehicles and equipment. Class 10.1 passenger vehicles above the CRA’s prescribed cost limit, as separate assets. Class 50 (55%) computers. Class 12 (100%) certain small tools. Manufacturing and processing equipment acquired between 2015 and 2025 was Class 53 at 50%. From 2026, Class 43 at 30%. Equipment CCA classes covers the detail.

The half-year rule and what suspends it

In the acquisition year, generally only half the normal CCA is available. Under this half-year rule, a machine bought in month eleven earns the same deduction as one bought in month one. The Accelerated Investment Incentive can suspend the rule or enhance the first-year deduction for eligible property, but its status keeps changing, so confirm what applies to the year. For a Mission operator timing a purchase around year end, the difference is real but smaller than most assume.

Financing, leasing and where the deduction lives

Buying, financing and leasing a machine give the same operating result and three tax profiles. A purchase, cash or financed, puts the asset on the CCA schedule, with only the interest deductible as it accrues. A true lease generally makes payments deductible as incurred. The better choice depends on the class rate, the term and the taxable income available, and may differ across a fleet. Interest deductibility covers financing.

Disposals: recapture and terminal losses

Sales and trade-ins work through the class, not the individual asset. Proceeds above the class’s undepreciated balance are recaptured into income in the year of disposal; if the class is emptied with a balance left, a terminal loss is available. Trade-ins cause most confusion: the invoice shows net cash, but the old machine must be removed at its trade-in value. For regular replacers, this is the most common cause of a surprise tax bill.

Discretion in a thin year

CCA is a claim, not an accrual: a corporation may claim up to the maximum for each class, or less, or nothing. In a weak year, claiming less preserves the balance for a year with income to absorb it, instead of deepening a loss that may take years to use. A non-capital loss can be carried back three years or forward, but the carryback must be requested. Decide these before the file closes; they are awkward to revisit.

What the provincial layer adds

British Columbia collects corporate tax through the federal return, so a Mission corporation files one T2: 11% combined on income eligible for the small business deduction, 27% above it, on a $500,000 limit. Outside the return, PST at 7% applies to most business equipment and is not recoverable, so it belongs in the machine’s capital cost. On heavy equipment, that is a meaningful amount.

Working remotely with a Mission operator

EverStone is a fully virtual, one-CPA firm, across the river. There is no Mission office and no local staff. Equipment invoices, financing agreements and disposal records arrive by secure upload, the asset schedule is built from those documents rather than from a summary, and the return is e-signed and filed electronically. For a machinery-heavy corporation that document trail is the file, and it is easier to keep straight when one CPA maintains it year over year.

Timing an equipment purchase needs a profit target first, which a forecast that gets updated gives you well ahead of the year end.

If personal tax in Mission and CFO support in Mission is the more pressing job, start there instead.

The companion page on our Mission bookkeeping page and getting the Mission returns filed covers that side of the work.