The fear of making errors when filing your business tax returns is understandable. Mistakes such as forgetting to claim certain deductions or failing to track or categorize expenses properly are not uncommon. Fortunately, you can amend a business tax return that you’ve already filed.
The type of tax return you’re filing will depend on whether your business is incorporated, but for now we’ll focus on T2 tax returns filed by corporations. If you already filed your T2 and have found that adjustments are needed, you must wait to receive your Notice of Assessment from the CRA. Filing an entire second return or requesting amendments before having received the NOA will lead to further complications and delays. In most cases, the time limit for this request is three years after having received your NOA, but this can vary significantly depending on your company’s corporate status at the end of the given tax year and many other factors.
Methods for Amendment
Once you’ve received a Notice of Assessment, you can request a reassessment electronically or by mail. If you used tax preparation software to file your T2, you can make your reassessment request using that software or by mailing the barcodes corresponding to your amended information to your company’s tax centre. If making the request entirely by mail, you can write a letter to the tax centre. The letter must include the details relevant to your amendments and the necessary supporting documents, along with your corporation’s name, its business number, and the tax year. It’s important not to send your complete return.
Some types of amendments to T2 corporate tax returns, such as retroactively claiming a deduction or credit that you weren’t previously aware of, are relatively straightforward and do not involve potential penalties. Others can be trickier and more urgent. Misreporting business expenses on financial statements, for instance, is a common issue that carries the possibility of being flagged for an audit and incurring penalties. Identifying mistakes and judging their impact or magnitude (often known as materiality) is not always easy. It’s one of many areas where a corporate accounting specialist can help you catch the right errors and make the right call.
Preventing mistakes with your business tax returns is the best way to avoid the need for amendments. At Cook & Company, we help business owners with tax planning, filing, and much more. Call (403) 768-4377 to speak with some of Calgary’s most experienced and trusted CPAs!