Corporate tax accountant for Prince George corporations

Corporate tax (T2) on its own is quoted after a free consultation, once the books and the year are understood. For a one-owner trades or trucking corporation, the full monthly bundle of bookkeeping, payroll and the year-end T2 with statements usually runs $450 to $650 a month. Published fees are on the pricing page.

British Columbia’s two corporate rates

A BC corporation pays federal and provincial tax on the same profit. Active business income that qualifies for the small business deduction is taxed at 2% in BC and 9% federally. Income above the business limit, and most investment income, is taxed at 12% in BC and 15% federally. The rates and their sources sit on BC tax facts.

The gap between those two rates is why the $500,000 limit deserves attention. A Prince George corporation that keeps profit in the company to buy the next machine is relying on that low rate. Anything that eats into the limit raises the cost of every dollar it keeps.

When the family owns more than one company

It is common in the north for one family to run a logging contractor, a trucking company and a holding company that owns the yard. Corporations controlled by the same people are usually associated. Associated corporations share one $500,000 business limit between them, and they have to agree how it is split each year on Schedule 23.

Getting that allocation wrong, or forgetting it, can push income in one company into the general rate. We look at the whole group, not one return at a time. Associated corporations and the small business deduction explains how control is tested.

Heavy equipment and the year you buy it

A tractor unit, a feller buncher or a press brake goes into a capital cost allowance (CCA) class and is deducted over time. In the year it is put to use, the half-year rule generally limits the claim. Buying a week before year-end and buying a week after can change the deduction for a full year.

Selling equipment matters as much as buying it. When a unit is sold or traded for more than the class balance, the excess comes back into income as recapture. When a class is emptied with a balance left, the remainder can be a terminal loss. Both land on the T2 in the year of the sale. We review planned purchases and trades before year-end, not after the dealer paperwork is signed. Equipment CCA classes in BC lists the common classes.

Contracts that run across your year-end

Contractors and mining-service companies often have jobs in progress at year-end. Work done but not yet billed, progress billings collected ahead of the work, and holdbacks still owed all affect income for the year. A corporation that simply records invoices as they go out can report a very different year from the one it actually had.

We look at each open job at year-end and record what belongs to the year. Holdbacks are tracked as receivables and payables. Where your year-end falls matters too. Many northern contractors choose a year-end in the slow season, so the count and the review happen when there is time. Choosing a fiscal year-end covers the choice.

Paying yourself out of the corporation

The T2 and your personal T1 are one decision made twice. Salary is deductible to the corporation, creates RRSP room and requires CPP contributions and T4 slips. Dividends are paid from after-tax profit, need T5 slips and create no RRSP room. Most owners land on a mix, set each year against what the corporation needs to keep.

What to avoid is the third route: drawing money through the shareholder loan account without deciding what it is. A shareholder loan not repaid within one year after the corporation’s year-end is generally taxed as your income. We review the account before year-end, while there is time to clear it with salary or a dividend. See salary versus dividends and the loan-balance tracker.

Balance due, instalments and the dates that slip

The T2 is due six months after year-end, but the balance is not. It is due two months after year-end, or three months for a Canadian-controlled private corporation claiming the small business deduction that meets the conditions. Interest runs from that date even if the return is not late. Once a corporation owes enough tax, instalments start, monthly or quarterly. Corporate tax instalments explains when they apply.

BC corporations also file an annual report with BC Registries within two months of the incorporation anniversary. It is not a tax return, and nobody at the CRA reminds you.

Sales tax and payroll inside the year-end file

A clean T2 needs clean balances behind it. The GST payable on the balance sheet should match the CRA account, after input tax credits. The PST payable should match the provincial account. Payroll liabilities should tie to the T4 summary and to WorkSafeBC. We reconcile each of those at year-end. A difference found then is a correction; a difference found in a review is an assessment.

Fully virtual, based in Abbotsford

EverStone is a one-CPA firm based in Abbotsford, serving Prince George corporations remotely. There is no Prince George office and no local staff. Records come in through a secure upload link, the year-end is reviewed by email or video call, and the return is signed electronically and filed electronically. With access through My Business Account, notices and balances are read directly. The CPA who asks about the loader trade-in is the one who signs the return. Businesses that also want bookkeeping in Prince George and personal tax in Prince George can have both quoted together.