Corporate Tax Return Cost

As a CPA firm in GTA, our team specializes in small and medium-sized businesses and is a highly trusted tax firm in Toronto (as reflected by hundreds of 5-star Google reviews). Preparing Corporate Tax Returns (T2 returns) is our specialty. We have a system in place that allows us to prepare accurate corporate tax returns at a reasonable fee.

A corporate tax (T2 return) is a tax that the government imposes on the income of a company. The money collected from corporate taxes is used as a source of income for a country. The taxable income of a corporation is determined by deducting costs, including the cost of the goods sold (COGS) and operating expenses from revenue.

Every corporation pays two taxes: federal and provincial taxes. Provincial taxes vary for each province. Further, a corporation’s taxable income is divided into two categories:

i) active business income and

ii) passive or investment income.

Canadian-controlled private corporations (CCPC) pay lower taxes on their active business income, up to $500,000, currently 12.2% in Ontario, compared to 26.5% paid by other corporations.

Documents and Information Necessary for Corporate Tax Returns

Information required for filing a corporate tax return includes incorporation documents, bank statements, invoices, receipts, details about shareholders and their % of shareholding, and details of dividends or salary paid. Other documents will vary from corporation to corporation.

What Expenses Can I Deduct on Corporate Tax Returns?

Generally, a corporation can claim any expense incurred to generate business income as long it is reasonable in the circumstances. The business owner must maintain the receipt and other necessary backups to substantiate their expense in case the Canada Revenue Agency (CRA) audits them.

Here is the most common list of expenses:

1. Advertising and promotion expenses
2. Automobile expenses
3. Bank and financial charges
4. Plant, equipment, and machinery (through the CCA method as discussed above)
5. Business licenses, memberships, and taxes
6. Consultation/expert advice fee
7. Accounting, bookkeeping and legal fees
8. Insurance expenses 
9. Internet and telephone charges
10. Meals and entertainment expenses
11. Office supplies expenses
12. Postage, shipping, and courier expenses
13. Property taxes & utilities 
14. Repair and maintenance expenses
15. Salaries and wages
16. Travel expenses

How Much An Accountant Charges For A Tax Return Ontario?

Canadian accountants typically charge for tax return services based on their specialization and the complexity of the client’s situation. This cost usually reflects the time required to prepare and file the return, as well as the expertise needed to ensure accuracy and compliance.

Before engaging an accountant, it’s essential to evaluate their experience, qualifications, and market reviews. Otherwise, there can be significant differences in service quality. A slight saving on an accountant’s fee might lead to higher costs due to missed tax planning opportunities or compliance issues.

Is It Worth Paying Someone To Do Your Taxes in Ontario?

It’s crucial to have an accountant, preferably a CPA, reconcile your financials to ensure compliance and avoid potential audits by the CRA. CPAs have in-depth knowledge of all eligible claims specific to your business. In the event of a CRA audit, an accountant can manage the process more effectively than a typical business owner, saving you both mental stress and money.

Do you need to file an Information or Annual Return?

Most people confuse an annual return with a tax return. An annual return is basically a renewal of the corporation, which is filed with the registrar of the corporation, such as Corporation Canada or Ontario Business Registry. In this return, a corporation confirms the name of the directors, registered office of the corporation, contact details, etc. The information return is an easy process but very critical; your corporation will be dissolved automatically if you don’t file your corporation’s information return timely.

A tax return is filed with the Canada Revenue Agency (CRA), providing details of your revenue and expenses and paying tax on your net income.

If you are looking for a reliable corporate tax filing service in Mississauga, Etobicoke, or Toronto, give us a call at 647-930-8130.

Disclaimer: The above contents are provided for general guidance only, based on information believed to be accurate and complete, but we cannot guarantee its accuracy or completeness. It does not provide legal advice, nor can it or should it be relied upon. Please contact/consult a qualified tax professional specific to your case.