Small Business Tax Return Checklist
Canadian small businesses come in all shapes and sizes. It can be a sole proprietorship, a partnership, or a registered corporation. The reporting obligations for each are quite different.
Before we delve into the documents required for each of these business structures, we’ll quickly outline the deductions your business might be able to claim.
What deductions can I claim for my small Canadian business?
As a business, you’re entitled to claim deductions for costs that relate to the running of your business. Remember: deductions don’t mean that you’ll get the money back at tax time. Rather, they allow you to reduce your total taxable income which, in turn, reduces your total tax liability.
These deductions should be true business expenses. If your purchases are made for you personally, or even partially for business purposes, you’ll need to adjust your deductions appropriately.
Here’s a list of some of the expenses you might be able to deduct:
- Costs associated with setting up your business;
- Supplies and office expenses (other than capital expenses);
- Business taxes, fees & similar expenses;
- Legal expenditure;
- Bank fees & interest;
- Home office expenses
- Salaries, wages, and benefits;
- Travel & 50% of associated expenses;
- Rent for your business premises;
- Management & administration fees;
- Bad debt; and
You can read more about these deductions on this CRA webpage.
Tax Returns for Small Canadian Businesses
Documents required to file a T1 tax return as a sole proprietor
Sole proprietors are unincorporated businesses owned and run by one person. It’s the simplest type of business structure.
Since you’re paying personal income tax or the income generated by your business, your accountant will file a T1 personal tax return on your behalf.
Find out more by reading our Personal Tax Checklist.
Filing a tax return for partnership income or losses
Each partner will include their income or losses from the partnership on their personal, corporate, or trust tax return.
For partners filing a personal income statement, refer to our Personal Tax Checklist.
For partners filing a corporate tax return, refer to the T2 Business Tax Return Checklist below.
A Checklist: Documents You Need for
Your T2 Tax Return
Here’s a list of the documents you should gather before you come to meet with us:
Small Business Tax Documents from the Financial Year
❐ Ending trial balance
❐ General Ledger details
❐ Aging summary of accounts payable & receivable
❐ List of bad debts
❐List of prepaid expenses
❐ Sales journal
❐ Payroll documents
❐ GST / HST returns and statements
❐ WCB returns and statements
❐ Corporate income tax details
Small Business Assets & Expenses
❐ Inventory list
❐ Bank statements, including cheque stubs
❐ Deposit book
❐ Investment statements
❐ Documents relating to leased or purchased assets
❐ Credit card statements
❐ Petty cash expense receipts
❐ Dividend statements
❐ Loan agreements, including amortization schedules
What documents do I need to bring with me to my tax appointment with my accountant?
Complete this checklist and bring all the documents you’ve got to your appointment with us, including any receipts or records. You can provide copies electronically or mail them to us if you’d prefer to meet virtually!
Your first appointment with HT & Associates
If it’s your first year using our services, we’d love to receive your past financial statements (including your prior ending trial balance) and copies of your previous corporate tax return documents to see what you’ve claimed in the past. Additionally, we’ll need your business details, including your business number, address,
These documents will help us maximize your tax return by making all the claims you’re legally entitled to.
Expert Tax Advice from Edmonton’s Small Business Tax Specialists
At HT & Associates, our team would be thrilled to help you minimize your small business tax obligations. We’ve got extensive experience helping small & medium-sized businesses in Edmonton and Fort Saskatchewan and our clients love our highly personalized services.
Get in touch for a free consultation