Corporate tax for Windsor corporations

For a one-owner Windsor corporation, monthly bookkeeping, payroll and the year-end T2 corporate tax return with statements usually cost from $500 to $700 a month all-in.

One return, two layers of tax, two deadlines

Ontario corporate tax is collected through the federal return, so a Windsor corporation files one T2 with Ontario schedules. Filing is due six months after year-end. Payment comes first: two months after year-end, or three for a qualifying Canadian-controlled private corporation claiming the small business deduction.

Interest runs from the payment date, so an on-time return can still carry interest if payment was late. Corporations that owed last year generally pay instalments this year. The T2 deadline calculator works out both dates, and current rates are on Ontario tax facts.

US-dollar revenue on a Canadian return

The T2 is in Canadian dollars; Michigan sales are invoiced in US ones. Each sale is translated when earned, open receivables are revalued at year-end, and exchange gains or losses are income. A single year-end rate, or booking only the Canadian deposit, gets the timing and sometimes the amount wrong.

We reconcile US-dollar accounts in both currencies, so the exchange figure is traceable. Foreign property above the threshold also needs T1135 disclosure; see T1135 reporting.

Capital cost allowance on the equipment Windsor runs on

A machining centre, a press, a tractor and trailer, a greenhouse boiler: each is deducted through capital cost allowance by class, not in the year bought. An asset must be available for use to be claimed, and the half-year rule generally halves year one, so a machine delivered but not commissioned by year-end may miss the planned deduction.

At the other end, equipment sold or traded for more than its undepreciated cost brings recapture into income. We keep CCA by asset and review planned purchases before year-end. CCA classes sets out the common ones.

SR&ED for shops that improve a process

Windsor’s tool, die and mould makers solve technical problems daily: new tooling, shorter cycle times, difficult materials. Some of that qualifies as scientific research and experimental development, claimed on Form T661 with the T2, and a Canadian-controlled private corporation can earn an enhanced refundable credit.

The test is technological uncertainty and a systematic attempt to resolve it, not novelty, and claims rest on records kept during the work. We check fit first. See the Windsor manufacturers page.

Paying yourself from the corporation

An owner can take salary, dividends or a loan. Salary is deductible, creates RRSP room and brings CPP; dividends are simpler but carry neither. The choice affects corporate tax, personal tax and, above the Employer Health Tax exemption, payroll cost. Loans catch owners: one not repaid within one year after the corporation’s year-end is generally taxed as income. We track the shareholder account and set the mix before year-end; the salary versus dividends calculator shows the trade-off, and shareholder loans sets out the rule.

How the county’s other sectors change the return

Each Essex County industry marks the T2 differently. A contractor’s return depends on recording holdbacks and work in progress, since a 10% holdback billed but not yet payable raises timing questions. A carrier’s turns on tractor and trailer CCA and drivers’ long-haul meal claims.

An incorporated Leamington or Kingsville greenhouse reports farming income, can use the cash method, and usually has energy as its largest cost. A Windsor retailer lives on its year-end inventory count, which sets cost of goods sold. We prepare each return with its industry in mind.

The rest of the corporate calendar

Three Ontario filings sit beside the T2: the Ontario Business Registry annual return within six months of year-end (a corporation can be current with the CRA yet not in provincial good standing), the Employer Health Tax return, and WSIB. T4, T4A and T5 slips are due by the last day of February, T5018 six months after the period. We track all of them, and deadline reminders can remind you.

Remote corporate tax

EverStone is a CPA firm serving Windsor corporations remotely. There is no Windsor office and no local staff. You authorize us through your CRA My Business Account, upload records securely and sign electronically, and the T2 is transmitted like any other Ontario return.