There Are Two Methods For Us To Do Your Bookkeeping...
A) Work From A Box of Receipts Where Many Are Faded and Unreadable
This method will potentially cost you a fortune if you have a lot of receipts and especially a lot of unreadable receipts.
B) Work From Bank Statements, Credit Card Statements and Cash Receipts
This method will save you a lot of money and works well if you're on top of what you buy for business and who supplies it. We prefer this method as it will be a lot faster and save you a lot of money. You'll still need to keep your invoices for 7 years in case you get audited.
Bookkeeping is Done to Produce a
Profit and Loss Statement (aka Income Statement)
and a Balance Sheet
T2 Corporate Tax Return Bookkeeping Checklist
We're Using Method B (Recommended) To Save You Money, Here's What We Need...
1. Bank Statements
1a) We need all of your business bank statements for each business bank account for the period that you need bookkeeping for.
1b) Have you sometimes paid for personal things with your business bank account and/or business things with your personal bank account? Then we'll also need your personal bank statements. You'll need to highlight the business transactions so that we know that they were for business.
2. Credit Card Statements
2a) We need all of your business credit card statements for the period that you need bookkeeping for.
2b) Have you sometimes paid for personal things with your business credit card and/or business things with your personal credit card? Then we'll also need your personal credit statements. You'll need to highlight the business transactions so that we know that they were for business.
3. Cash Receipts
We need all of your receipts for anything business related that you paid cash for, since they will not be on your bank or credit card statements.
4. Business Use of Home Office Calculations
4a) Provided you don't have an office outside of your home, you are allowed to pay yourself for the use of an office inside your home as a reimbursed expense - tax free!
4b) Your home office should have office furniture and equipment to qualify... NOT a dining room table, kitchen table, bed, etc.
4c) Calculate what percentage of your home is being used for business by measuring the square footage of your home office and dividing the square footage of your home. So for example, if your home office is 360 square feet and your home is 1,800 square feet: 360 divided by 1,800 = .20 or 20%. Therefore you can expense 20% of the following home expenses...
4d) Mortgage Interest if you own your home and have a mortgage or rent if you don't own your home
4e) Utilities: oil, gas and electricity
4g) Cleaning Supplies
4h) Property Taxes if you own your own home
4i) Maintenance and Repairs to your home
4j) Maintenance and repairs to your home office can be calculated at 100%. For example, if you paint only your office, you can claim 100% of the paint and painter.
5. Vehicle Expense - Mileage Log
5a) Whether you or your company owns or leases your vehicle, we need a mileage log to prove how much you drive for business and how much you drive for personal use.
5b) If your company owns or leases your vehicle your expenses will be on your bank and credit card statements or cash receipts
5c) If you own your vehicle, we will calculate your vehicle expense based on your mileage log...
For 2023 it's $0.68 for the first 5,000 km and $0.62 for every km over 5,000
For 2022 it was $0.61 for the first 5,000 km and $0.55 for every km over 5,000
For 2021 it was $0.59 for the first 5,000 km and $0.53 for every km over 5,000
For 2020 it was $0.58 for the first 5,000 km and $0.52 for every km over 5,000
For 2018 it was $0.55 for the first 5,000 km and $0.49 for every km over 5,000
6. Meals and Entertainment vs 'Customer Appreciation' Advertising
6a) In an effort to grow your business you are able to entertain, wine and dine clients, potential clients and business referrers, but becaue you ate/participated too, our accountant will back out 50% of everything you classify as Meals and Entertainment
6b) Six times per year you are able to host an 'Employer Sponsored' Event and categorize it as Advertising Expense at 100% instead of 50%. Better to pay for the event costs with your business account, but if you paid with your personal account, make sure you send us the receipts for 100% reimbursement.
7. Medical Expenses: Doctors, Drugs and Travel Expenses
7a) Your corporation can expense the majority, if not all, of your medical expenses if you have an insurance policy allowing you to. Don't have one yet? We can give you a Health Spending Account aka Private Health Services Plan for $200/year that is retroactive 365 days from today.
8. Travel Expenses For Sales, Marketing and Inexpensive Labour
8a) Want to have your company pay for your travel? Your corporation can expense two out of town conventions per year.
8b) Going to a Third World Country? Many business owners go to third world countries looking for inexpensive labour for marketing and administration hires.
8c) Many business owners make a mistake with meals when traveling. Travel meals are categorized as Meals and Entertainment at only 50% unless you are in the transport business or in remote areas for business. Ask our staff for more info.
9. Payroll for Your Employees: Summaries are Due By Feb 28
9a) Paying employees is considered bookkeeping at SBTA and takes approximately one minute per employee per pay period. T4 Summaries must be submitted to the CRA by February 28. We need a TD1 Form and the following information for each employee:
9b) Full Name
9c) Full Address including Postal Code
9d) Date of Birth in this format: Month, Day and Year. Example: January 30, 1985
9e) Social Insurance Number
9f) Hourly Rate of Pay
9g) Vacation Pay Agreement: Labour Standards say vacation pay is 4% (2 weeks per year) minimum
9h) Pay Frequency: Monthly, Semi Monthly, Bi Weekly, or Weekly
9i) Your spouse can work for you
9j) Your children can work for you. Atlantic Provinces, your children can work at any age, western Provinces are 12 year olds and eastern Provinces are 14 year olds. They must have their own bank account that's not joint with Mom or Dad; they must be paid at regular pay periods of other employees; you need to keep detailed timesheets; they may be interviewed by CRA auditors so be sure they actually work and can answer questions about their tasks. They can do simple marketing and administrative tasks if underaged. Ask our staff for details.
10. Dividends For Shareholders. Summaries Are Due By Feb 28
10a) Paying dividends to shareholders are usually etransfers and should be highlighted on your business bank statements by you so that we know how much you pay yourself in dividends.
10b) A Dividend Summary must be submitted to the CRA by February 28 or there is a $100 penalty
10c) We charge dividends at $50 per shareholder
11. Prior Year Tax Return or Articles of Incorporation and NOA
11a) If this is your first year in business we'll need your Articles of Incorporation which also has your Corporate Access Number and Date of Incorporation
11b) If you've already filed a T2 Corporate Tax Return, we'll need the last one that was filed as well as a Notice of Assessment (NOA) from the CRA if you have one.
11c) Corporation's Address (If changed from what on previously filed Tax Return)
11d) Phone Number (If changed form what’s on previously filed tax return)
11e) Director/President/Signers Address and Phone Number (if different from previous tax return)
11f) Schedule 50 Shareholder information; Full Name and BN or SIN for each shareholder and percentage of Ownership
(If any changes from previous Tax Return)
12. You Need to Pick a Fiscal Year End and File GST Accordingly
12a) If this is your first year in business we recommend that you set your fiscal year end for the end of the month before you incorporated. For example if you incorporated on October 15 we recommend that you choose September 30 as your fiscal year end. That way you don't have to pay taxes for 15 months. Some business owners pick December 31. In that case they need to pay any corporate taxes owing much sooner than 15 months.
12b) We should submit your GST within 30 days after the end of your fiscal year.
12c) If you submit over $3,000 in GST then you must file quarterly moving forward, so therefore your bookkeeping must be done quarterly to know how much GST that you owe. You have 30 days after the quarter to file.
12d) If your sales volume is over $1,000.000 then you need to file GST monthly, by the 20th of the following month
12e) Do you use the “Quick Method” for GST calculation?
13. Business Number
13a) When you incorporate your business you were given a Business Number. (Not to be confused with your Corporate Access Number)
14. Annual Return - $80 or $130?
14a) Every year you need to tell the Registry Office if any of the Shareholders have changed or if the Head Office address has changed. If you go to the Registry and do it it's approximately $80. If you want us to do it, we charge $130
14b) If you don't file your Annual Return for 2 years your corporation will be dissolved and if you want to keep operating you will need a Corporate Revival
15. Loan Documents
15a) Do you have a corporate loan? We need the loan agreement
16. Lease Documents
16a) Do you have a corporate lease? We need the lease agreement
17. Multiple Corporation Ownership
17a) Do you or any Immediate family members (Spouses, Children, Parents, or Siblings) own shares in a private corporation other than the Corporation we are currently preparing tax return for? (Excludes Aunts, Uncles, or Cousins)
18. Main Business Activity
18a) What is the corporation's main revenue-generating business activity?
18b) Please Specify the principal products or services provided and their percentage of the Total Revenue
18c) If your corporation's main revenue generating activity is Construction, a T5018 for each Subcontractor needs to be filed.
18d) If we are filing the T5018 we need all Subcontractor Information
Full Name or Business Name
Sin or GST Number
Address of Sub contractor
Calculated Total Amount paid to Contractor for Calendar Year
18e) Have you filed a T5018?
18f) Are you a non-construction business that has subcontractors?
19. My Business Account
19a) Do you have a CRA My Business Account?
19b) If not, please visit the following link to set this up: https://www.canada.ca/en/revenue-agency/services/e-services/cra-login-services.html
20. Other Income
20a) Are you earning income outside of Canada (employment, business, or investment), and if so, where?