Step by step guide for filing business income tax return

Are you a self employed Canadian? Or a proprietor? Or else into any sort of partnership? If yes, then you must be distressed regarding filing an income tax return. If this is the case, then this article is for you. Given below is a step by step guide for all the Canada based business persons who wish to file income tax returns.

• The first step is to understand what your business is all about. What is your business type? Are you a sole proprietor or in a business partnership or into any sort of corporation? If you have income outside of your regular employment, then you are a sole proprietor, even though you haven’t registered your business. In this case, you have to fill out the Form T2125: Statement of Business or Professional Activities. And if you are in a business corporation, then you need to fill Form T2.

No matter how small is your income, it needs to be reported!

• Next step for filing income tax returns is downloading the tax return package for the entire year. For your ease, you can even use the software programs certified by CRA (Canada Revenue Agency). There are a number of authorised software programs available.

While majority of them are free for use till a threshold income, some others like Studio Tax 2012 are completely free regardless of the income levels. Moreover these software programs are easy to use and are supported on Windows platform. For those, who are interested in filing the forms online, need to download the current tax package form from the official webpage of Canada Revenue Agency.

• Form T2125 is the most important one. Filling this form is where your actual work regarding filing business tax return really starts. It is wise to follow the Business and Professional Income Guide for filling this form. You need to have detailed information regarding your income and business before starting to fill up the form T2125. Details like, income type, gross income, commissions, fees, etc. for the current year are to be mentioned accurately in the form.
• You can opt for EI. Though traditionally self employed Canadians were not allowed for EI, but the recent federal government, has allowed EI options for the self employed Canadian residents. So that they can take a number of benefits like employment insurance, maternity and paternity leaves, etc.
• Last step is to know the payment deadlines. As an income tax payer, you have time until June 15 of every year to pay the taxes. And any balance needs to be paid by April 30.

If you are looking for a Canadian tax expert, contact Michael Atlas. He is the leading and most renowned Toronto tax accountant.

Josep Guardiola is a income tax expert. He also author of tax treaties, in this article he provides toronto tax accountant tips. For more information you can visit Taxca.com.

In these times of economical downpour and recession, many people find themselves immigrating to other countries in search of greener pastures.