Corporate Income Tax Filing
We are all about educating our client base so that they understand how important this annual event is for their business. More importantly, what this likely means for their business relationship with the Canada Revenue Agency.
Each corporate income tax return benefits information from these elemental components:
- Creation of an internally audited financial statement.
- Bank & Credit Transactions.
- Payroll processing, namely calculating Federal Tax, Provincial Tax, EI, and CPP.
- Revenue/Income-related invoice processing.
- Vendor related bill payments and bill issues.
- Cash transaction record.
- Shareholder investments.
- Source deduction calculations, proof, and payments.
- Reconciliation of all transactions.
- Accounts receivable/payable investigations, payments, and collection.
If you proactively stay on top of these elements, the filing of your corporate income tax return is usually rather straightforward.
Where most business owners fall into deep traps, are when they don’t keep tabs on these elements, let payments and receivables lapse, have inadequate ratios between revenues and expenses, and quite normally, when they don’t reconcile and clean up outstanding accounts receivable/payables. It’s no surprise, in 2017-2018’s fiscal year, CRA requested RFI’s (Request Further Information) from 39% of the small businesses. And when you talk to the majority of small business owners, they look at their accounting as a tedious cost, they wish did not exist. It’s no coincidence that where most business owners are cheeping out, is where most are being hit with RFI’s. That same year, the CRA collected 600+ million dollars from small business owners due to improper accounting principles. It’s no coincidence how vigorously important it is as a small business owner, to have a good accountant. The one’s that do, navigate with ease.
These traps, in addition to omitting the filing of their year-end tax returns, normally leads to an elephant in the room, which many new business owners never address. The hiring of a good accountant, and the peace of mind during the inevitable audit. Read more on what to look for in an accountant here.
Like with anything left unaddressed, this usually snowballs into a larger problem. Adding the late fee’s, and the likelihood of large GST refunds due to multiple years of no filings, and you have normally established a nice target for yourself to receive a CRA RFI, or in most cases, auditing. Of course, we support the CRA because they are out to protect fraudulent activities and major errors from compiling into tax payments that are truly owed; in most cases than not, due to inadequate accounting principles. Nevertheless, it is never a nice feeling having to present yourself in front of the crown because of improper accounting principles, even if you’re the regular, honest business owner. It’s that peace of mind you need, knowing if you had to present yourself in front of the CRA, that all would go over well.
This is where AccNet shines in our relationship with our business clients. You can see our reviews here.
When it comes to insurance and being well-represented in an audit, it should be the forefront of every relationship between the CRA and each business owner. How you correlate your business activities to the relationship with a good accountant, is the difference-maker in succeeding against RFI’s/audits, or significantly failing and constantly having a target on your back.
Being of this mindset allows us to help scale your company with all the tools available to us, whilst taking good care of you if you ever catch the attention of the crown. We support you fully and standby our accounting principles so that this is one less thing for you to need to worry about.
Reach out today to set up a consultation with us, to see how we can help you.