Frequently Asked Questions
What should I bring or Send in?
- A copy of the prior year’s Notice of Assessment.
- T3, T4, and/or T5 slips, RRSP Contribution slips, Donation slips, Childcare receipts, Children’s Fitness receipts, Medical receipts: (if the amount exceeds 3% of net income or $2000), and Official Tuition slips: (T2202A).
- Summary of all Capital Transactions for the year (proceeds & cost).
- Business Revenue and Expenses summarized by major categories: (detailed receipts not necessary). As well, any asset additions and dispositions during the year (i.e. computer equipment etc.).
- Any other Official Tax Receipts that may be applicable, (when in doubt please enclose).
What should I bring or Send in?
- Trial Balance, Balance Sheet, Income Statement, and General Ledger. If applicable; Aged Account Receivable, Accounts Payable Listings and the Bank Reconciliation for the year end.
- All Canada Revenue Agency Correspondence received during the year.
- Details of any changes in mailing address, share ownership, etc.
- Any other official documents considered relevant to the year end. (When in doubt please enclose.)
Tax Benefits of Incorporation:
- Active business income retained in a corporation is subject to a 14.5 % tax rate on the first $500,000 of income earned annually (which may be the most significant tax benefit of incorporation, dependent upon the amount of profits retained in the company).
- Incorporation allows for the introduction of inactive shareholders for income splitting purposes.
- Incorporation allows for the use of corporate profits for business expenses that are not tax deductable, (includes 50% of meals & entertainment, golf dues and fees, life insurance, etc.).
- Opportunity to access the $750,000 capital gains exemption on the sale of qualifying small business corporation shares.
Other Benefits of Incorporation:
- Limited liability of the shareholders.
- Existence of the company survives death of a shareholder and/or changes in ownership.
- Allows for multiple stakeholders; shareholders and creditors.
The decision to incorporate is typically fact specific to each business and the intentions of the owner. When considering whether to incorporate you should always consult a professional.