Corporate tax accounting in itself is a really complex topic. For businesses in Toronto, it’s even difficult because of the financial rules and regulations the authorities have imposed. Understanding the various deadlines is crucial to ensure compliance and avoid penalties. Here’s a guide to help you understand the corporate tax accounting deadlines that every business should know.
Fiscal Year-End
To begin corporate tax accounting Toronto you will need to establish a fiscal year-end. The most common fiscal year is that which falls under the calendar year, usually taking December 31 as the end of the calendar year. However, some companies may choose a different fiscal year based on the cycles of their businesses. Your tax return filing dates and reporting requirements are determined through the end of your fiscal year.
Corporate Tax Return Filing Deadline
The due date for Canadian corporation tax return T2 is six months from a fiscal year end. Assuming your fiscal year end is December 31, then your T2 return would be June 30 of the year following. If your year-end for your company is something else then change the date of the filing. Note that you need to lodge before the end of the year to avoid penalties.
Instalment Payments
Many businesses have to pay annually in installments. Tax authorities, mainly the CRA, tend to require a corporation to pay taxes on installment basis if during the previous year its overall tax burden was over a certain limit. Such installment payments are made on specific dates during the year. It may include March, June, September, and December. Tell your CPA accountant in Toronto to remember these dates so you do not incur interest.
Penalties for Late Filing
Corporate tax filings past due or missed attract heavy penalties. It takes both number of days between the filing date and the filing due date, and the outstanding amount, for the CRA to compute its penalties. Filing on time averts unnecessary cost and hassle.
Maintaining Records
Proper records are also essential to ensure a good tax return. Keep proper and detailed records for all the financial transactions, income receipts, expenditure receipts, and any other relevant paperwork that can be needed for tax credits. There may be some requirements during an audit from the CRA, and orderly records will help streamline the process and reduce the possibility of error.
Engage a Tax Professional
Company tax accounting can be quite complex to comprehend. However, you may seek services from a reputable tax advisor to clarify the responsibilities required of you, remind you of due dates and ensure you are in compliance. A tax specialist can also advise on techniques for tax planning that may eventually benefit your business financially.
Stay Informed
Laws and rules pertaining to taxes are subject to change. Keep up with any modifications that could impact the accounting for corporation taxes. For up-to-date information, regularly check the CRA website for updates or speak with a tax expert.
Conclusion
Knowing the tax accounts of Toronto businesses will keep them in line and out of hot water. Fiscal year-ends, to date filing deadlines, payment due dates, and record maintenance will make navigation of the tax landscape an easy feat. If you are still unsure, you should consult a tax professional to ensure you meet all of the requirements and optimize your tax situation.