There are millions of people pondering about starting a business. Some may have lost their jobs, while others wish to go the extra mile for their family. Some dream of living a luxurious life and do not want to be bossed around the workplace. Regardless of the reasons, everyone understands the complexities of setting up a business and the intricacies that come with it, especially about filing taxes.
Are you aware of the rules of filing a Canadian corporate tax return?
You must file a return no later than six months after the end of each tax year.
A business is like a child, and you have to nourish and take care of it at every step. One of the financially costly and apparent reasons for filing your corporate tax on time is the Canada Revenue Agency (CRA). CRA collects the corporate tax for all provinces and territories except for Alberta and Quebec. Failing to file your return on time will require you to pay penalties.
In Canada, corporate tax is the federal and provincial income tax for corporations carrying out business activities. The federal income tax is filed as T2, a mandatory corporate income tax return; however, each province has its own way of handling provincial income tax.
Even though your corporation isn’t located in Canada, you may still have to pay corporate income tax if your corporation:
- Had the taxable capital gain
- Carried on business in Canada
The money collected from filing corporate taxes is used as revenue for the country. A knowledgeable business tax advisor in Milton assists business owners to identify how much corporate tax one needs to pay. These taxes vary depending on the size of the company and province. The baseline tax rate is 38% of taxable income and is called Part 1 tax.
What Does Corporate Tax Apply To?
An experienced corporate tax advisor in Nelson will help you understand what corporate taxes are applied on. Basically, they are valid for:
- All corporations, including small, medium, and large that originated in the country
- Corporations carrying out business inside the country
- Foreign ventures with a permanent establishment in the country
How to File Corporate Income Tax?
Corporate income tax must be filed within six months of the end of your tax year. If your tax year-end date is March 31, your filing due date is September 30. If your tax year ends mid-month, your taxes are due six months later on the same day in that month.
How to Pay Corporate Income Tax?
Payments are spread out across the year so that corporations can pay their taxes in installments, monthly or quarterly. Those corporations owing under $3,000 in taxes for the year may not have to make installment payments. You can easily pay corporate income tax by debit, online banking, credit, wire transfer, cash, or a service provider.
How Can Corporate Tax Consultant Help?
Filing corporate tax is not an easy task; for some, it could be boring while it could be challenging for others. Filing taxes on time has several benefits if you know how to do it.
- The complex language of tax laws and policies can be confusing for an ordinary person. An expert corporate tax consultant in Milton understands the intricacies, making filing taxes easier by simplifying rules.
- A well-versed tax consultant is aware of deductions and exemptions and can help in proper and error-free tax planning.
- As the deadline for income tax filing comes near, it could become difficult for business owners to find the correct tax figures. A corporate tax expert will reduce this stress and give you returns on corporate tax filing. They will review every business transaction and save an ample amount of time.
What Expenses Can You Deduct on Corporate Tax Return?
Small business owners can claim these write-offs to help reduce their business’ taxable payable and income:
- Home-office expenses
- Vehicle expenses
- Rent of the office
- Online/magazine/television/newspaper advertising
- Capital assets
Every corporation, irrespective of its size, must take corporate taxation seriously. An efficient and experienced corporate tax consultant deal with tax-related issues and strive to provide solutions that can make the entire filing process easier and less time-consuming.