Corporate tax accountant for Saanich corporations

Corporate tax (T2) work on its own is quoted after a free consultation, because a single-shareholder consulting company and a family farm corporation are different files. For an owner-managed trades or service corporation, a bundle of bookkeeping, payroll and the year-end T2 with statements usually runs $450–$650 a month. The return covers Schedule 50 for shareholders, the CCA schedule, the small business deduction and the T4 or T5 slips for the owner’s pay.

When two households share one business limit

The $500,000 business limit that gets the BC 2% rate is shared among associated corporations. Association follows control, and the rules look through spouses, children and holding companies. A Saanich couple where one runs an engineering consultancy and the other an incorporated renovation business may find the two companies associated, depending on who owns what.

If they are, the limit has to be allocated between them on Schedule 23, and income above the allocated share is taxed at the general rate. Most couples are nowhere near the limit, so association often costs nothing. The time it matters is when one company has a strong year. The associated corporations guide walks through the tests.

Savings inside the company, and the passive income grind

Owners who leave profit in the corporation often invest it there. That is a reasonable plan, but investment income above a threshold reduces the business limit in the following year. A company with a large portfolio can lose part of its small business deduction on the active income that funded the portfolio in the first place.

A holding company does not avoid the grind, because associated corporations count together. What helps is knowing the figure before year-end, so dividends, salary or the timing of a capital gain can be planned around it. See passive income and the small business deduction.

Farm corporations on the peninsula

Some Central Saanich and Blenkinsop Valley farms have been incorporated for years, and the corporate return has particular features. Shares of a family farm corporation can qualify for the lifetime capital gains exemption when the conditions are met. Farm property can pass to a child on a tax-deferred rollover. Both depend on records kept long before the transfer.

The T2 for a farm also has to reconcile land held in the corporation with land held personally, and equipment bought by one and used by the other. Getting those ownership facts clear in the statements is the groundwork for a succession that works. See farm accounting in Saanich for the operating side.

Consulting corporations and the personal services question

Saanich has many incorporated consultants whose work is done for a short list of clients, often public-sector bodies in nearby Victoria. Where the corporation looks, in substance, like an employee of one client, the CRA can treat it as a personal services business. That removes the small business deduction and limits the expenses the company can deduct.

The test turns on control, tools, risk and integration, not the contract’s title. It is worth a review before the contract is signed rather than after an assessment. Our personal services business review sets out the factors, and the Saanich consultants page covers the rest of that file.

Shareholder loans and money taken out

In a small company, the owner’s personal spending sometimes runs through the corporate account. Those amounts sit in a shareholder loan. A loan not repaid within one year after the corporation’s year-end is generally taxed as the owner’s income, without the corporation getting a deduction for it.

The answer is to clear the balance by year-end with a salary or dividend declared on purpose, and to track it monthly in the meantime. The shareholder loan tracker shows the deadline for each draw. When salary is the route, the T4 and the CPP that follow are part of the plan.

PST and the employer health tax, at corporate level

Two provincial items sit next to the T2. PST that a corporation should have paid on purchases from out-of-province sellers, such as software, has to be self-assessed. The BC Employer Health Tax applies once annual BC remuneration exceeds $1,000,000, with associated employers sharing the exemption. Few Saanich corporations reach that, but a growing group of related companies should check. Rates are on the BC tax facts page.

Choosing a year-end that suits a seasonal company

A new corporation picks its fiscal year-end on its first T2, and changing it later needs CRA approval. A December year-end is the default for many owners, but it is not always the right one. A peninsula farm or a summer-heavy landscaping company may prefer a year-end after the season’s sales are in and the inventory is low, so the count is small and the result is known.

The choice also sets the T2 deadline, the balance-due date and when the owner’s bonus can be accrued. A year-end that lands in a quiet month means the CPA’s questions arrive when you have time to answer them. See how to choose a fiscal year-end.

Fully virtual, based in Abbotsford

EverStone is a one-CPA firm based in Abbotsford, serving Saanich corporations online. There is no Saanich office. Year-end records come in through a secure upload link, the T183 and engagement letter are signed electronically, and the planning conversation before year-end runs by video. The same CPA keeps the books, if you want that, and prepares the T2 from them.