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  • Writer's pictureDayna Dumont

How to File Your T2 Incorporated Tax Return

Updated: Jun 26

Wouldn’t it be great if tax season was as easy as pie? Like – what if we could just float through the tax season without heart palpitations and endless phone calls and coordination? What if we pulled up our socks and prepared for this unavoidable obligation to the Canada Revenue Agency? I’ll be honest with you, it’s very possible with the right preparation and the right help.

Every year, Canadians rush to gather all of their documents to complete their individual tax returns on time, but what about your T2 incorporated return? That’s where it gets even more complex.

But don't worry, we’ve put together some items that'll help you navigate the waters of your first T2 incorporated return. This way, you'll be prepared to either give your tax preparer everything they need to complete your T2 return or you'll be ready to tackle it yourself.

How to File Your T2 Incorporated Return

In Canada, all corporations (including inactive corporations) must file a T2 return for every tax year, even if there’s no tax payable (exceptions to this rule include Crown corporations, charity corporations, etc.). The T2 harmonized return now covers both the Federal and Provincial returns for corporations (since 2009).

When it comes to preparing what’s required for your T2 incorporated return, we highly recommend hiring a professional to assist as it can become very complicated depending on the nature of your business.

Regardless of which route you choose, it’s still very beneficial to understand the basics of how corporate income tax returns are prepared, as this will help you feel at ease during the year and throughout your tax season.

T2 Incorporate Return Form
Source: Canada Revenue Agency Website

What You’ll Need for Your T2 Incorporated Return

There’s a number of records and information that you’ll want to have available for your tax preparer to make this process as smooth as possible, the details of which are as follows:

Basic Business Information

Your basic business information will be required to file your return, especially if you've never previously worked with the tax preparer. You'll want to provide the following:

  • Business Number assigned by the Canada Revenue Agency

  • Date of Incorporation (including the province of incorporation)

  • Legal Name of Corporation

  • Incorporation Certificate Number

  • Type of Business Activities

  • Contact Information (addresses and telephone numbers of directors and the signing officer, SIN numbers of shareholders, etc.)

Bookkeeping Records

If you have not taken the time to organize your bookkeeping throughout the year, you can also hand this over to your tax preparer at this time. Be sure to include the following:

  • All bank records (statements, credit card statements, etc.)

  • All cancelled cheques

  • All receipts and invoices for your income and expenses

Business Records

You’ll also want to gather all the applicable business records to avoid a back-and-forth scenario with your tax preparer. Those things include:

  • Notice of Assessment for the previous tax year (if applicable)

  • Payroll records

  • GST/HST reports filed for the year

  • Tax Installment payment information

  • Bank Statement for the last month of the tax year

When to File Your T2 Incorporated Return

First, you'll have to determine your fiscal period, i.e. your corporation's tax year. More times than not, a fiscal period does not line up with a regular tax year and calendar year. There may be some benefits to offsetting your fiscal year end with the regular calendar year – a professional can help you determine the best option for you.

So, how do you determine your corporate tax year? If you have a new corporation, you can declare your tax year on your first T2 return after incorporation. Your tax year/fiscal period cannot be longer than 53 weeks (371 days).

On your very first T2 return, you would use the date of incorporation as the start of your tax year. After your first return, your tax year start will be the day after your tax-year end date.

For example: If you incorporated on February 11th, 2022 and chose to have a tax-year end date of November 10th, 2022 – your first tax year would be from February 11th, 2022 to November 10th, 2022 and the second tax year would be from November 11th, 2022 to November 10th, 2023.

The one exception to this is when a professional corporation is incorporated as a partnership, as the tax year-end date will always fall at the end of the calendar year. Therefore, a partnership's first tax year could be from February 11th, 2022 to December 31st, 2022, and the second tax year would start on January 1st, 2023 and end on December 31st, 2023.

Your T2 Incoporated Return Deadlines

Every corporation must file its T2 return no later than six months after the end of its tax year. The balance of tax payable is due two or three months after the end of your tax year, depending on your balance due day.

T2 Incorporated Return - Tax Year ends and Filing Deadlines
Source: Canada Revenue Agency Website

New Year, New Start

After completing your tax return and paying your taxes, you might think about how to improve the process when your next corporate tax deadline rolls around.

Perhaps you want to ensure that you keep all the required business records and information easily accessible for tax time.

Perhaps you’ll set a reminder to complete specific bookkeeping tasks every month so that you don’t have to incur the expense of having someone else do it during the year.

Perhaps you may even see the value in hiring a bookkeeper to perform your bookkeeping tasks throughout the year instead of waiting until the very end. If that's the case, not only can we assist with your corporate tax return, but we can assist with your bookkeeping tasks throughout the year as well.

Contact us today to find out how we can make simplify your business financials for your upcoming fiscal year!

1 comment

1 Comment

Adam Wandler
Adam Wandler
Dec 18, 2023

Working with Tax Consultant Prince George made the typically stressful tax season a breeze. They were knowledgeable, responsive, and took the time to understand my unique financial situation. I felt confident that my tax return was in good hands, and the end result reflected their expertise.

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