What Your Accountant Needs to Prepare a Corporate Tax Return
There are still 21 days of summer left but at this time of the year everyone is back at work, the children are in school and it’s now time to “knuckle down” for a little while at least. So here it goes …
If your company’s year-end was July 31, your accountant will want to have a look at your records very shortly, especially if you have had a profitable year. The Canada Revenue Agency (CRA) will want to receive its share of your profit no later than October 31, that is, 3 months after your year-end. If you weren’t profitable, then CRA will be willing to waiting until January 31 to receive your corporate tax return (T2), being 6 months after your year-end.
Your accountant’s office will send you a reminder along with a list of the information they need which usually includes the following:
• A copy of the back-up of the bookkeeping software you use or your manual ledger book to review your company’s transactions for the year;
• Your last month and first month bank statements (for example, July and August) and bank reconciliation;
• A list of the assets you acquired during the year and copies of the purchase invoices;
• Your last month and first month business credit card statements (for example, July and August);
• Your GST Returns and/or Notice of Assessments until June 30, 2010;
• Your PST Returns until June 30, 2010;
• Your HST Returns and/or Notice of Assessments after July 1, 2010;
• Your Statement of Accounts for Current Source Deductions, if you have employees;
• Your T4 Summary for 2009, if you have employees;
• Bank Loans and/or Credit Line Statements;
• Mortgage and Property Tax Statements;
• Number of kilometres driven for business use on your personal vehicle and auto operating expenses;
• If you qualify, then your business use-of-home details such as square footage of your office, mortgage interest or rent, utilities, and property taxes.
• A confirmation that you have filed your BC Annual Report (www.corporationonline.gov.bc.ca);
• Your Notice of Assessment from the previous year’s tax return
• The sum of the Tax Installments you have paid during the year.
I recommend that you reconcile your GST, PST, HST and Payroll Remittance accounts. You never know, an entry may have been posted after you have filed a return and may not have been included when the next return was prepared. Also, please ensure that the ending balances on your Balance Sheet for your credit card, bank loans, and mortgages reconcile to the statements provided by the financial institutions.
Some accounting offices are trying to be “paperless” and scan your records instead of copying them to reduce the amount of paper being used and stored. Ask your accountant if that is their policy and if there would some savings for you if you or your bookkeeper did the scanning instead.
By being organized, there will be less back and forth between you and your accountant’s office, your financial statement and tax return will be ready sooner and your accountant’s invoice may be lower since less time requesting and waiting for information and reconciling will have been spent on your file!
Previous Columns
About the Author
