Business Checklist

SOLE PROPRIETOR AND CORPORATION TAX CHECKLIST

Let us help you to claim all tax credits and deductions you are entitled to with proper guidance and in an organized way.
Sole-proprietorships (Unincorporated)

As a sole proprietor you report your business income on your personal tax return (T1).You do not need to file a separate tax return for your business income

Small corporations (Incorporated)

In Canada, corporation is a separate legal entity as per the income tax law. If you earn income in a corporation, you have to file a separate tax return (T2) for your business income and can’t be combine in (T1)

What do you need when filing

Sole proprietor

  • All your T-slips as a sole proprietor
  • Any other source of income
  • Business income and expenses in detail for the year to be filed.
  • Invoices and receipt, and details of GST-HST collected and paid

Corporation

  • Last year notice of assessment if filing for the first time with us.
  • Last year’s return if filing with us for the first time
  • Copy of incorporation papers for the first time filer with us
  • All T-slips the corporation received T4A/T5/T3 etc
  • GST/HST details for the tax year
  • Financial statements – if already prepared
  • Invoices and receipts, payroll information, bankstatements in CSV format for the bookkeeping done by us
  • Account payable and receivable at end of the fiscal year
  • Employee deductions payable at end of fiscal year

Business Income

  • Invoices from sales or services
  • Sales records if any
  • Accounts receivable at end of fiscal year if on cash basis
  • Any other source of income, returns and allowances
  • Business chequing/savings account interest

Inventory

  • Opening inventory total dollar amount
  • Purchases during year
  • Ending inventory total dollar amount
  • Materials and supplies

Expenses

  • Advertising
  • Meals and entertainment: receipts should have a name of person and the purpose of the meeting/event
  • Vehicle expenses – fuel, insurance, lease/finance, payments with interest, repairs, maintenance, parking, car washes
  • Mileage log or kilometers driven for business purposes
  • Payroll data for employees; statement of account forcurrent source deductions if bookkeeping done by client.
  • Other employee expenses taxable or tax free
  • Professional fees – lawyers, accountants, and consultants
  • Office supplies and expenese
  • Interest expense – business loans, investments expensesand interest
  • Business travel expenses
  • Rent/property tax
  • Utilities/heat hydro, phone, internet
  • Accounts payable at end of fiscal year (cash basis)
  • Business assets and liability Insurance

Home Office Expenses

If you work from home, you may be able to deduct a portion of your home offices expenses. The tax rules differ, depending on whether you file as a sole proprietor or for a corporation. List of expenses are as under:

  • Mortgage interest
  • Property tax/rent
  • Utilities – heat/hydro/phone/internet
  • Home insurance
  • Home maintenance and repair costs

Capital Assets

Capital assets cannot be expensed in the year acquired but must be depreciated over the period of time. Record of Purchase and sale all Assets should be maintain. Example of capital assests are as under:

  • Vehicles used for business
  • Machinery and equipment
  • Tools
  • Buildings if owned by corporation.