Can I Use an Online Tax Preparation to File My Corporate Income Tax?

Filing personal taxes online can be a breeze. Often there's no need to go into an office, coordinate with a CPA, or pay exorbitant fees. So it’s no surprise that 93% of Canadians opt for electronic filing come tax season. The question is, can filing your corporate (T2) tax return be just as easy?

After all, T2 Corporation tax returns have their own complexities. As a business owner, you’ll want peace of mind that your return is accurate and reviewed by expert eyes. You might also have specific questions about your industry and any special tax considerations you should know.

In this article, we’ll unpack what you need to know about filing your T2 return online and the benefits of using TurboTax for your corporate taxes.

Who has to file corporate income taxes?

Most Canada-based corporations—known as resident corporations—have to file a T2 return each year. This includes nonprofit organizations, tax-exempt corporations, inactive corporations, and corporations with no tax payable.

There are just a few exceptions to this rule. Resident corporations that don’t have to file a return include:

• tax-exempt Crown corporations
• Hutterite colonies
• registered charities

So, what about corporations that aren’t based in Canada? They also have to file a T2 tax return if they carried out business in Canada and had a taxable gain or disposed of taxable Canadian property within the tax year. For example, if a construction business is based in the US and completes a project in Canada during the relevant tax year, it will need to pay tax on the income earned.

How can you file your T2 corporation tax return?

Now, let’s dig into the steps required to actually file those corporate taxes. To start, there are 2 different return forms, based on certain eligibility:

• T2 Corporation Income Tax Return. This is the standard form that most corporations use.
• T2 Short Return. This is a basic version of the T2 return. It can only be used by corporations that meet certain eligibility requirements and have a simplified company structure. For example, many nonprofits can file T2 Short Returns. Canadian-controlled private corporations (CCPCs) can also use T2 Short Returns if they don't have any net income to report for the year or if they report a loss of income.

File your corporate taxes online

Yes, you can file your T2 or T2 Short Return online. All corporations with some exceptions have to file their T2 return electronically. Those exceptions are insurance corporations, non-resident corporations, corporations reporting in a functional currency, and those exempt from tax payable under section 149 of the Income Tax Act. Corporations can use TurboTax Business Assisted to file their T2 corporation returns easily, electronically and with live guidance from tax experts.

Mandated businesses that don't file their returns electronically will be charged a $1,000 penalty.

Prepare financial forms

You’ll need some key financial documents on hand to prepare and file your T2 tax return, such as your:

• Income statement
• Balance sheet
• Cash flow statement
• Business expenses
• Invoices
• Bank and credit card statements

To avoid scrambling come tax time, it’s important to stay on top of your bookkeeping and make sure your financial records are updated year-round. Be sure your My Business Account is accessible for any additional information you might need for your corporate taxes.

Follow CRA regulations

Corporations need to use the CRA’s General Index of Financial Information (GIFI) codes to prepare the financial statements they submit with their taxes. The CRA uses these codes to easily collect financial information from corporations in a standardized format.

Each item on a corporation's financial statement comes with a corresponding code. For example, "cash" is 1001 and "office expenses" is 8810. With  TurboTax Business you can search for each code right on the platform, making it easy to fill out and submit your financial statements.

Learn more with the CRA’s complete guide to GIFI codes.

Meet the deadline for corporate tax returns

The deadline for your corporate tax return is 6 months after the end of your fiscal year. So, if your fiscal year ends on December 31—which is common—your corporate tax return is due on June 30. If your fiscal year ends on the last day of the month, your return is due by the last day of the 6th month. If your tax due date lands on a weekend or statutory holiday, you can submit your return by the next business day.

If you miss your corporate tax return deadline, you might face certain interest charges and penalties, so it’s important to file on time.

How can you file your corporate T2 Short Return?

If you're eligible to file a T2 Short Return, you still must file electronically according to the CRA's mandate. While this form is much shorter than the standard T2 Return, it may come with added requirements. 

For example, along with your T2 Short Return, you might also have to submit a Schedule 8 Capital Cost Allowance (CCA) and a Schedule 50 Shareholder Information form depending on your business structure and finances.

Do you need an accountant or CPA to file your corporate return?

Not all businesses and their tax situations are complex, so you may not need an accountant to file your corporate T2 tax return. You can use  TurboTax Business to receive business tax expert guidance throughout the entire filing process.

Lean on our tax experts to answer your questions while preparing your return, and review it before you submit.

The benefits of using TurboTax to file your corporate taxes

Filing your corporate taxes doesn't have to be complicated—and you don't have to do it alone. With TurboTax Business, you can access business tax expert guidance while you prepare your T2.

When it's time to file, get a final review from a seasoned business tax expert to make sure your return is compliant with the latest tax laws. TurboTax helps make filing easy, so you can get back to growing your company.

Accurate tax filing with TurboTax

You run the business, we handle the taxes. Filing your taxes in Canada can be straightforward, even with corporate T2 returns. Use TurboTax to get your taxes filed on time, meet CRA regulations, and submit your return with ease and accuracy.

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