Ahem! Your taxes are due within 90 days from the date of your year-end; the return is due in 180 days. Given that this is a leap year, that extra day throws a curveball on the due date.
Knowing your key dates and deadlines ensures that you get your information to your accountant on time, file on time, and avoid any interest and penalties.
For those with December year-ends, the filing deadline is June. Your payment date was in March. If you missed it, relax. Send Canada Revenue Agency (CRA) a cheque for what you think you owe, and explain you are stressed about not having paid your taxes.
I call clients around the time of their year-end date so that they can start preparing the documents for me. Some key year-end documents may not have been sent to you yet; you can add them to the package once you get them.
Corporate taxes can get complicated. I send my clients a checklist of what they need for their year-end. It makes my job easier and saves them money on their accounting. The checklist includes:
• Notice of assessment from the prior year or incorporation documents for new company. This allows us to see what you were assessed in the prior year to compare with this year, and to make sure it was all done right. If you are a new corporation, we need to file your first return, with all the necessary documentation.
• All 12 months of statements for each bank account, credit card and loan. We require all your monthly transactions so that we can accurately do the bookkeeping for your year-end. It is easier for your accountant if you keep your business and personal expenses separate, so have a business credit card and a personal credit card.
• Statements for the months directly preceding the year-end. This allows us to account for transactions that were part of your current year’s bookkeeping, but may have not cleared the bank account or credit card statement until after the year-end.
• Receipts for all large purchases. Your accountant will need to document your large purchases as proof of purchase for both their records and in case CRA asks for this information. It is also important to have the receipt so that we can accurately apply your deduction amounts for this purchase.
• Documents for any transactions not in the ordinary course of business. Anything not a normal expense in your line of business is a red flag for CRA. Document these transactions in case you are ever questioned about this transaction.
• All GST, PST or HST returns for the year. Your accountant needs to know how much you have paid CRA through the year, so as to not pay them again. It also helps us reconcile your-end liability to make sure it balances.
• All payroll transactions and T4s. This helps us ensure you have paid the right amount in source deductions, and are receiving the appropriate write-offs for your staff.
• Confirmation of your balance at your year-end with CRA for: Corporate tax – RC0001; Payroll – RP0001; and GST/HST – RT0001. This ensures that the balance you think you have is what is filed with CRA. I can’t count the number of times that CRA does not receive something, or can’t find a return, or says you have a balance owing when you thought you had filed it, or sent in payment.
• Any other documentation you think would assist us in completing your file. Some people are over-organized and give us so much stuff that we wonder if they really thought they could write these things off. Then there is the opposite: people who aren’t organized and couldn’t find all their documents if their life depended on it.
Too much is better than too little. Bring in everything you think is a write-off or that is necessary for your year-end files, and we will decide what we can use.
The preceding is for information purposes only. Prior to making decisions, contact your accountant for advice.
Simeen Gaidhar-Bhanji, CA, owns Simeen Bhanji Chartered Accountants, which offers a variety of services to corporations and individuals, ranging from tax planning and consulting, compilation, reviews and audits of financial statements, corporate and personal tax returns, HST services, and consulting for internal control, financing and tax.