Corporate Tax Preparation in Canada: A Year-End Checklist
Corporate tax preparation goes more smoothly when the year-end records tell a complete story. Your tax preparer needs more than a bank balance or a total from the accounting dashboard. They need reliable books, supporting documents and explanations for transactions that affect the corporation.
This checklist is for incorporated small businesses in Canada, including owners in Halifax and Edmonton. Use it to organise the handover and identify questions early. Your exact requirements depend on the corporation's activities, province and circumstances.
Confirm the year end and both sets of deadlines
Start with the corporation's tax year-end date. Do not assume it is December 31 or that a date in accounting software matches the filed tax records. If there is a difference, resolve it before preparing the next return.
The CRA generally requires the T2 return within six months after the end of the corporation's tax year. Paying the balance is a separate obligation: the federal balance is generally due two months after year end, with a three-month deadline for qualifying Canadian-controlled private corporations. Instalments may also apply. Confirm your corporation's actual deadlines rather than treating the filing date as the payment date.
Bring the bookkeeping through the full year
Confirm that all business bank and credit-card accounts have been reconciled through year end. Review unpaid customer invoices, supplier bills, payment-processor balances and any accounts holding unexplained amounts. Provide the trial balance, general ledger, profit and loss statement and balance sheet if available.
If another provider completed the previous year end, share the final financial statements and adjusting entries. The current year's opening balances should be reviewed against that final position. A list of transactions is not a substitute for checking the balances that carry forward.
Gather the supporting records
Bank, credit-card and loan statements, including details of interest and financing.
Sales and expense records, outstanding invoices and supplier bills.
Payroll summaries and records of amounts paid or credited to owners.
GST/HST returns, account statements and relevant CRA correspondence.
Prior corporate tax returns, notices of assessment and final year-end statements.
Details of inventory, where relevant, and a count or valuation record for year end.
Include a short explanation of unusual items, such as a large refund, a grant, an insurance payment, a new financing arrangement or a transaction with a related business. Flag uncertain items instead of quietly putting them into a convenient expense account.
Separate equipment and owner transactions
Provide invoices and disposal records for equipment, vehicles and other significant assets, together with dates and relevant business-use information. Do not assume that a large purchase should be deducted in full simply because the payment left the bank account. Its accounting and tax treatment needs review.
List money the owner put into the corporation, amounts taken out, personal costs paid by the business and business costs paid personally. These items need to be distinguished from sales and ordinary expenses. Discuss salary, dividends and shareholder balances with your preparer rather than choosing a label only to make an account balance disappear.
Check whether a separate provincial return is required
The federal T2 is not always the only corporate income tax return. Unless exempt, a corporation with a permanent establishment in Alberta generally must also file an Alberta AT1 return. Tell your preparer where the business operates and flag any move, expansion or new location during the year.
Agree on the handover and review
Before work begins, confirm whether the fee includes bookkeeping corrections, year-end statements, the corporate return, provincial filings and follow-up questions. Agree on the records you will supply and who is responsible for each approval and submission.
Before authorising filing, review the key figures and outstanding questions. Keep the final return, filing confirmation, financial statements and supporting records together. Record-retention requirements vary with the type of record and circumstances; a filed return is not a reason to discard the underlying documents.
What if the books are not ready?
Raise that early. A catch-up or clean-up review may be needed before tax preparation. Share approaching deadlines and CRA correspondence so the work can be prioritised. Bookkeeping, filing and payment issues should each have a clear next step.
Bejeweled Accounting & Tax Ltd provides corporate tax preparation and bookkeeping support, with virtual service across Canada. We review what you need, explain the records required and agree on scope and fees before work begins.
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