T2 corporate tax return preparation in BC

December 31 year-end? The T2 is due in six months, but any balance is due in two or three. Get your corporate tax quote now.

Who does the work: a Chartered Professional Accountant prepares and reviews your file and answers your questions, from the first quote to the filed return. About EverStone CPA.

Need statements a bank will accept? See year-end financial statement preparation.

Tax return, bookkeeping, statements: four different pieces of work

Owners often ask for “the T2” and mean several things. They are separate pieces of work, and a quote should say which ones it includes.

If the bookkeeping is incomplete

The return needs complete books. We list what is missing, quote the work to bring the books current separately, then file at the quoted fee.

If you already have a bookkeeper

Keep them. We work from their books, send back the year-end adjustments, and explain anything worth changing going forward. How we work with bookkeepers.

What is included

• The T2 return and every schedule it needs, e-filed, with the confirmation sent to you.
• Year-end adjusting entries so the books and the return agree rather than diverging quietly.
• The capital cost allowance schedule, with the half-year rule and any disposals applied.
• The provincial return where the province administers its own, as Alberta and Quebec do.
• Salary and dividend planning for the owner, decided before the year closes rather than after.
• A written summary of what the year showed and what changed from the one before.

The tax return deadlines that actually bite

Filing is due six months after year end; payment two months after for most corporations, three for those claiming the small business deduction. Waiting for the filing date usually means months of interest.

Instalments are a separate clock again. How corporate instalments work sets out when they start and how they are calculated.

How a year-end T2 runs, from close to filing

A corporate tax return is the last step of a sequence, and most of the cost and most of the risk sit in the steps before it. This is the order the work goes in.

1. Close the year in the books. Bank and credit card accounts reconciled to the statements, receivables and payables confirmed, and the shareholder loan account agreed with the owner.
2. Year-end adjustments. Accruals, prepaid expenses, inventory counts where there is inventory, and the capital assets bought or sold in the year, which drive capital cost allowance (CCA).
3. Financial statements. A balance sheet and income statement, usually as a compilation engagement under CSRS 4200, which is what the T2 is built from and what a bank asks to see.
4. The T2 and its schedules. The GIFI financial statements (Schedules 100 and 125), net income for tax purposes (Schedule 1), CCA (Schedule 8), dividends paid (Schedule 3), shareholder information (Schedule 50) and, for a B.C. corporation, the provincial tax calculation.
5. Owner pay, settled. Salary through payroll with a T4, or dividends with a T5 slip, decided before the return rather than after it.
6. Filing and payment. The return is filed electronically within six months of year-end. Any balance owing is due two months after year-end — three for a Canadian-controlled private corporation claiming the small business deduction that meets the conditions.

If the corporation owes enough, instalments start the next year, and the notice of assessment is checked against the return.

On price: for a one-owner trades corporation with around 200 transactions a year, monthly bookkeeping, payroll and the year-end T2 with statements together usually run $500–$700 a month all-in, as set out on our pricing page. A T2 on its own is quoted in writing after we review your enquiry, once we have seen the books.

Four T2 mistakes that cost more than the return

A shareholder loan left standing. Money taken out that is not salary or a dividend sits in the shareholder loan account. Unrepaid one year after the corporation’s year-end, it is generally taxed in full as personal income, with no dividend credit.

Owner pay with no slip. A salary needs payroll remittances and a T4; a dividend needs a T5. Money that moved without either has to be characterized after the fact, usually at a worse rate.

Filing late when nothing is owing — and when something is. The late-filing penalty is 5% of the unpaid tax plus 1% for each complete month late, up to 12 months. With no balance owing the penalty is nil, but a late return still delays refunds and draws attention.

Missing the instalment notice. Once a corporation’s tax passes the threshold, instalments are expected the following year, and interest runs on each one that is short.

Who this is for, and who it is not

A good fit: an incorporated Canadian business with a fiscal year to close, whether the books are ours or someone else’s, and whether the year is current or several behind.

Not a fit: a sole proprietor with no corporation, who reports business income on a personal return: a self-employed return. Listed companies differ again: see public company tax returns.

For your own year-end, the T2 due-date calculator gives the filing and payment dates, and the instalment calculator shows whether instalments start.