Everything you need to know about T2 Corporate Tax Return

All the resident corporations cited in the Canadian Proficiency have to file a corporation income tax known as T2. To be frank, business owners need to file a T2 tax return along with the T1 personal tax return.

Who Has to File a T2 Return ?

All the non-profit organizations, tax-exempt corporations and inactive corporations, which are located in Canada, are supposed to file a T2 tax return every year irrespective of their income is taxable or not.

Similarly, for non-resident corporations, which carries its business in Canada, or business that has a taxable capital gain or business that meets the criteria listed under the “Disposition of taxable Canadian Property” are supposed to file a T2 tax return at any time in every year.

Although the T2 return needs to file yearly by the corporations, the respective corporations must file the T2 form within the 6 months of every financial year-end.

However, Tax-exempt Crown Corporations, Hutterite Colonies, and Corporations registered as Charities are exempted from filing a T2 tax return.

Categories of Checklists Listed in T2 Return

• General : In this category, previous year’s taxation details, personal status details, and so are supposed to be provided to us to prepare your return accurately.
• Financials : Various financial documents, reports and other relevant details from ehich figured will be taken and filled in the return. Other supporting documents to verify the integrity of data before filling the return.
• Expenses : In this category, checklists cover all the expenses carried by the business operations such as Paper costs, Utility bills, Advertising & Promotions, Office Supplies, Travel, food, Busyness Tax, and so.
• Vehicle Expenses : In this category, checklists cover all the expenses related to vehicle transportations such as Fuel, Kms Driven in a year, Insurance, Repairs & Maintenance, License, Auto Loan Interest, Lease Costs, and so.
• Home Office Expenses : In this category, checklists cover the details of office space, Mortgage Interest, Office Utilities, Property Taxes and so.

Although most of the corporations prefer electronic mode of filing T2 forms using CRA certified software, the government of Canada has compulsory for corporations with over $1 Million annual gross income to file T2 using the Internet. Besides, the relevant authority’s process electronically filed returns within 6 weeks. Please find below checklist for T2 returns.

Checklist for T2 Return

General

• Last Year’s Tax Return (If This Is Our First Year)
• Last Year’s Notice of Assessment (NOA)
• Details Of Changes in Directors or change in shareholding
• Details in case of Amalgamation, Merger or conversion or new related or associated corporation
• Amounts Paid By Tax Instalments.

Financial Documents:

• Backup of Accounting Software
• Bank Statements/ Reconciliation
• Property, Plant & equipment – Addition, Disposal
• Mortgage documents, loan or lease documents
• Sales register
• Payroll Summary and returns
• GST/HST returns

Vehicle Expense

• Total Kms/Miles Driven During the Year
• Kms for Business Use
• Auto Gas/Fuel
• Auto Repairs and Maintenance
• Auto Parking
• Insurance
• License
• Auto Loan Interest
• Leasing Costs

Home Expense

• Space (Sq. Ft.) Used For Business
• Total Sq. Ft. Of Home for Business Use
• Mortgage Interest from Annual Mortgage Statement
• Rental Income
• Utilities (Heat, Hydro, Water)
• Condominium Fees
• Property Taxes
• Any Maintenance Expenses