As a bookkeeper or accountant for a Canadian business, it is important to stay on top of the tax-related documents that need to be prepared for to ensure compliance with Canada’s taxation laws. A failure to prepare all of the necessary documents can lead to fines or penalties for the business owner. So, what documents should bookkeepers or accountants of Canadian business owners be aware of to collect during tax season?
Business Number:
First and foremost, a Canadian business owner should always have a valid business number. This number should be provided by the Canada Revenue Agency (CRA). It is required for all businesses to collect, report or remit federal or provincial taxes.A business number is also necessary when opening a business bank account, or registering for GST/HST, and remitting employee deductions.
T2 Corporate Income Tax Return:
An important tax form for accountants to prepare is the T2 Corporation Income Tax Return. This form is used to report the income, gains, losses, and deductions of a business, and must be filed with the CRA by the due date. Businesses that do not file their taxes on time can face penalties and interest charges.
Financial Statements:
These documents are used to provide a summary of the business’s financial performance during the year, including any income and expenses. Bookkeepers and accountants should ensure that all financial statements are up to date and accurate before filing them. The main financial statements are as follows: balance sheets, income statement, cash flow statements, and statements of retained earnings.
GST/HST Reports:
Accountants for businesses that are registered for the Goods and Services Tax (GST) and/or Harmonized Sales Tax (HST) should be filing regular reports with the Canada Revenue Agency (CRA). These reports provide an overview of the amount of GST/HST that the business has collected and remitted.
Payroll Records:
Businesses that employ staff should be keeping records of payroll deductionsand payments, such as T4s and T4A slips. These documents need to be filed with the CRA in order to report the income and deductions of their employees.
Corporate Records:
All incorporated businesses must maintain a series of corporate records, such as detailed minutes from shareholder and board meetings, resolutions, and all other documents that outline the business’s operations. Accountants and bookkeepers should make sure that these documents must be kept up to date and organized in order to be compliant with the CanadaBusiness Corporations Act.
Financial Institution Records:
Any business that holds accounts with any financial institutions must be sure to file regular documents to report income and deductions to the CRA. This includes records of interest and dividend income, as well as invoices for any payments made to suppliers.
LedgerDocs Can Help:
Bookkeepers and accountants can help business owners to avoid hefty fines and penalties fromthe CRA by using LedgerDocs, an online bookkeeping document management platform. LedgerDocs allows businesses to store, organize, and track all of their financial documents in one place, simplifying the entire accounting process. By having access to all of the necessary documents for tax filings, bookkeepers and accountants can quickly and easily ensure that their clients’ taxes are always up-to-date and avoid costly fines or penalties from the CRA. Contact us to get started collecting and organizing your tax documents.
