You’ve been quoted a price to file your corporate taxes. But does it cover the questions that matter most to your business?
Perhaps you took money out of the company during the year. Your holding company owns investments, and you are considering selling a business asset. It would be helpful to understand what those transactions mean for both the company and yourself before filing the returns.
A filing quote may cover some of that work and leave other decisions for a separate discussion. Corporate tax filing costs in Canada reflect the records, analysis, and advice included in the engagement. The difficulty is recognizing what that means before a transaction is complete or an unexpected bill arrives. The useful starting point is what the fee covers for the business you actually have.
For this reason, Boyer & Boyer prices corporate tax work after an initial consultation rather than applying one standard fee to every corporation. The proposal reflects the companies involved, the condition of the records, the filing history, and the advice required. T2 filing and review may form part of the annual engagement, while planning, CRA support, or business-structure work may require a separate scope. The owner should be able to see those boundaries before approving the engagement.
One owner and three questions a filing fee may not answer
Consider a hypothetical owner with an operating company and a holding company. The bookkeeper maintains the books during the year, but the owner has 3 major concerns:
- Money they withdrew from the operating company
- Investments the holding company holds
- An asset sale they’re weighing for next year
What happened to the money taken out of the company?
Each concern creates a different kind of work, beginning with the money taken out of the operating company. Its records show an amount due from the shareholder. The owner remembers transferring money for personal expenses and putting some money back. The opening balance came from the previous accountant’s file.
The ledger identifies a balance. It does not settle the tax treatment. The accountant needs to establish what the payments represented, when they occurred, what was repaid, and whether the opening amount is supported.
An advance from an owner to a company, a loan from the company to its owner, and compensation are different situations. They should not be treated as interchangeable simply because the entries sit in a shareholder account. The CRA’s shareholder loans and debts folio describes rules and exceptions that depend on the facts. A repayment date alone is not a complete analysis.
For this owner, the immediate issue is whether the annual engagement includes assessing that balance. If the historical records need reconstruction, that is work to account for in the first-year budget. Advice about taking money out next year is a further decision, with its own timing and responsibilities.
Do the investment records support the tax reporting?
The investment records create a different problem. The holding company moved securities between institutions. Its current statements show the holdings and a sale during the year, but the available records do not support the investment’s tax cost.
Entering the sale proceeds would leave the missing-cost question unresolved. The accountant may need acquisition history and earlier adjustments before assessing the disposition. That is a different task from reporting activity using complete investment records.
Here, the owner needs to distinguish a one-time problem from an annual service. Reconstructing missing history may be needed this year. Maintaining supported investment continuity is the work to plan for after the gap is resolved. The following year’s budget should reflect that change rather than automatically repeating the catch-up charge.
The same principle applies to balances between the companies. If one company’s records do not agree with the other’s, someone must investigate the difference. The number of returns alone does not describe that effort.
What should happen before the asset is sold?
The proposed asset sale raises a question about timing. The owner is considering selling an asset next year. The current return reports transactions that have already happened. Advice on the proposed sale needs to happen early enough to inform the decision.
The owner needs to know who will assess the corporate and personal implications, what records that person needs, and who will implement any recommendation. A year-end filing engagement should not be assumed to cover all of those responsibilities.
This is where an ongoing CPA relationship can become useful to an owner. The value is having a defined route for raising a decision before it is completed, with the advice and implementation work agreed upon. That does not mean every proposed transaction requires a lengthy planning exercise or guarantees tax savings.
For help with the corporate filing and advisory needs behind these questions, explore Boyer & Boyer’s corporate tax filing and planning services.
Why two corporate tax quotes can look further apart than they are
Return to the same owner. One proposal covers the two returns and year-end work, provided the owner supplies reconciled accounts and supported opening balances. Another includes defined intercompany reconciliation and an advisory discussion, with historical reconstruction priced separately.
The first headline price could be lower and still be the right choice if the owner’s bookkeeper can supply the required information. It could become a larger total commitment if the missing work must be purchased elsewhere. The second proposal could bring more tasks into one relationship without covering every unresolved issue.
Compare the work before deciding what the price difference means. These illustrative scopes are not Boyer packages or actual quotations.
Under Proposal A, year-end work and the returns for both companies are included on the assumption that the owner supplies reconciled records and supported opening balances. The owner must arrange reconstruction of the old shareholder balance, supply the investment continuity, and have the bookkeeper resolve the intercompany difference. Advice on a future withdrawal or sale is commissioned separately. Its return fee therefore represents only part of the commitment for the situation described.
Proposal B brings more of the work into the engagement. It includes intercompany reconciliation for specified accounts and periods, an initial assessment of the investment records, and a defined advisory discussion. The shareholder reconstruction still needs its own scope; any investment reconstruction requires approval, and implementing advice is separately agreed. A broader annual engagement can leave open items too. “Assessment included” does not mean that every resulting task is included.
The owner can now compare the proposals on a useful basis. For Proposal A, the cost of work completed by the bookkeeper or another provider belongs alongside the accountant’s fee. For Proposal B, the separately priced investigation and reconstruction must remain visible. Neither proposal is automatically better. The decision depends on whether the owner has a workable plan for every necessary task, knows who will provide advice, and understands which costs remain unresolved.
Prepare a first-year budget that you can use again next year.
Start with the recurring fee for each company. Add required one-time work and any separately commissioned advice. Avoid adding a task twice if it is already included in another fee.
The first-year professional-fee budget combines the recurring engagement, required one-time work, and any advice commissioned separately. Corporate income tax payments belong in a separate budget. Applicable sales tax on professional services is another amount to include when planning the cash commitment.
An unpriced issue belongs on the list of open items, not in the total as zero. If the accountant must investigate before quoting the next stage, establish the cost of that assessment, any agreed spending limit, and when further approval will be needed. Fixed fees, estimates, and time-based billing can each work when the assumptions are clear.
Then look ahead. Once the shareholder balance is supported and the investment history is established, which tasks disappear and which continue? A business adding another company or completing a major transaction may need a different annual scope. A business that has resolved its historical gaps may have less catch-up work.
A useful annual budget reflects those changes. It should not simply inherit last year’s invoice.
Have shareholder balances, corporate investments, or related-company transactions to resolve? Discuss your corporate tax situation with Boyer & Boyer.
Know what you are receiving beyond a filed return.
The owner in the example may have another requirement: a lender wants financial statements. The words “financial statements included” need enough detail to establish whether the engagement meets that request.
Financial information reported through the CRA’s General Index of Financial Information does not, by itself, establish that an audit, review, or compilation engagement has been provided. A lender’s exact requirement should be identified before commissioning the work.
Tax preparation involves its own analysis. Accounting profit is not automatically income for tax purposes. The CRA describes Schedule 1 as the reconciliation between financial-statement income and income for tax purposes. Accounting depreciation and capital cost allowance are one example of why further treatment is needed. Our guide to corporate tax deductions discusses the difference between an accounting expense and its tax treatment.
A corporate group introduces relationship questions too. The CRA uses Schedule 9 to report corporate relationships, and its T2 guide describes Schedule 23 for associated Canadian-controlled private corporations. Related and associated are different concepts. A holding company’s existence does not, by itself, determine the reporting required.
These are reasons to identify the actual deliverables, rather than treating every engagement labelled “corporate taxes” as equivalent.
Make the first conversation about your business.
You do not need to diagnose the tax treatment before contacting a CPA. Start with what changed and what you need to decide. For the owner in our example, a useful introduction would be, “We have two companies, an old shareholder balance, and investment records that need attention. I am considering an asset sale next year and want to know what advice is included in the annual engagement.”
That gives the discussion a clearer starting point than asking for a fee based on revenue alone. The supporting records can follow through the firm’s approved secure intake process. The starting information includes the companies involved, their ownership and fiscal year-ends, previous corporate returns and assessments, and the current state of the books. Explain known gaps in the records and identify material shareholder, intercompany, investment, or asset transactions. Upcoming decisions and lender reporting requirements help establish what advice and financial information the business needs.
Before approving the engagement, you should know who handles the current filing, who advises on the next decision, and how additional work is approved. If another adviser prepares your personal return, establish how the relevant information will be coordinated. Define any included CRA follow-up rather than assuming that assessment questions, amendments, objections, and audit representation are the same service.
For procedural filing information, see our T2 corporate income tax return guide.
Obtain a quote that reflects the decisions ahead.
The lowest filing price and the most expensive proposal can both leave an owner with unanswered questions. The useful comparison is whether the engagement covers the work the business needs, with a clear route for advice before the next transaction.
Tell us which companies are involved, what has changed, and which decisions you want help assessing. Discuss a corporate tax engagement with Boyer & Boyer.
