Small company owners must concentrate on completing their taxes while Canadians finish their income tax returns. Self-employed people have until June 30 to file their tax forms, and the payment deadline is still May 2. The deadline for filing for people with incorporated businesses is six months following the conclusion of the fiscal year for the business. However, three months after the fiscal year’s conclusion is when all unpaid company taxes are due. Follow this Canadian Corp Taxes Filing Guide.
File Canadian Corp Taxes Like a Pro
To record business income, self-employed people must complete the T-2125 form and their regular T1 individual income tax return. You can get assistance from corporate tax accountants for filing your tax. Here are some tips from Billlah and Associates corporate tax accountant to assist you in filing your corporate tax return:
Review your COVID-19 government benefits
Any COVID-19 government subsidies you get are taxable unless your company is a non-profit or registered charity, exempt from income taxes.
You must report any COVID-19 help you received on your income tax return for the tax year (fiscal year) that it was given to you. Recipients must pay taxes unless their organization qualifies for an exemption since they did not deduct taxes for some benefits at the source.
Depending on the type of entity your firm is, there are different ways you might claim a rent subsidy on your tax return (incorporated, sole proprietorship, trust, or income tax-exempt).
Deduct Remote Work Expenses
Last year, people who worked from home because of COVID-19 could deduct up to $400 in remote working expenditures from their taxes because of the recently introduced temporary flat-rate approach. This year, it has been raised to $500. The temporary flat-rate solution does not need additional paperwork or expenditure reports to be submitted.
The old approach, also known as the Detailed Method, is still an option for eligible people. It incurs significant expenses due to their remote work. Using this approach, people could be able to request more money than the interim flat-rate method’s $500 cap. However, they’ll need to provide more information.
Maintain Proper Records
You must keep records of all business costs for six years after the end of the last tax year to which they pertain as a business owner. These documents consist of copies of credit card and bank statements and financial statements, tax returns, invoices, receipts, and cheques.
For several reasons, it is advised that you digitize as many of your documents as you can. Numerous apps from tax preparation services in Toronto can be of great help. They can assist you in managing and filing your receipts and uploading their details.
Assess your Eligibility for the Small Business Deduction
The Canadian tax system is set up to favor Canadian-controlled private enterprises in specific ways (CCPC). Your company may be eligible to claim the Small Business Deduction (SBD) on the first $500,000 of active business income. It would be best to consider the federal and provincial taxes rates when determining the SBD for your incorporated business.
Be careful while using your capital cost allowance
You can deduct a portion of your depreciating capital assets each year thanks to the Capital Cost Allowance (CCA). A Capital Asset is a property you buy for your firm with a life expectancy longer than a year. A few examples are vehicles, electronics, machinery, equipment, land, and structures.
Work with an Professional Tax Accountant
Offloading your tax filing to professional tax accountant near you can be a wise decision. They can provide you with specialized tax advice depending on the structure of your company. It helps you free up your time and concentrate on other aspects of your business.
It’s challenging to obtain general information online because corporations, sole proprietors, partnerships, and limited liability entities have various tax preparation and reporting procedures. Take help from our small business accountant Toronto, for all your taxation processes.
