T2 – Corporate Tax Filing

What Is T2 Corporate Tax Filing? 

The T2 Corporation Income Tax Return is the annual tax return that all incorporated businesses in Canada are required to file. It is used to report a corporation’s income, expenses, net profit or loss, and corporate taxes payable. Every corporation must file a T2 return each year, even if there was no income or business activity during the year, in accordance with requirements set by the Canada Revenue Agency. 

Who Needs to File a T2 Return?

A T2 return must be filed by all corporations operating in Canada, including federal and provincial corporations. This applies to active corporations, inactive or dormant companies, small businesses, holding companies, and professional corporations. Even corporations with zero income or no operations during the year are still required to file a T2 return. 

What Is Reported on a T2 Return? 

A T2 Corporate Tax Return may include one or more of the following:

• Corporate business income

• Operating and administrative expenses

• Net profit or business loss

• Capital assets and depreciation (CCA)

• Dividends paid to shareholders

• Shareholder loans and balances

• Corporate taxes payable or refundable

• Required schedules and disclosures

All financial activity must be reported as required by the Canada Revenue Agency.

T2 Filing Deadlines

• The T2 return is due 6 months after the corporation’s fiscal year-end

• Corporate taxes payable are generally due 2 or 3 months after year-end, depending on the corporation

Late filing or late payment may result in penalties and interest. 

Deductions You Can Claim (T2)

Proper T2 filing helps reduce corporate tax payable by claiming eligible business deductions under Canadian tax rules. 

Common Corporate Deductions

• Business operating expenses

• Salaries and wages

• Rent and utilities

• Office supplies and equipment

• Professional fees (accounting, legal, consulting)

• Advertising and marketing expenses

• Vehicle and travel expenses (business use)

• Insurance and bank charges

• Capital cost allowance (depreciation)

Why Professional T2 Filing Matters

Corporate tax filing is more complex than personal tax filing and requires accurate financial reporting and compliance with CRA rules. Professional T2 preparation helps ensure expenses are properly claimed, required schedules are completed, and filing deadlines are met. This reduces the risk of CRA reassessments, penalties, audits, and compliance issues.

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