Preparing a corporate (T2) tax return

When adding a new client , tick any relevant options from the SmartStart client outline screen and click Continue. A series of keywords will appear from the section Identification, followed by the other sections you have ticked from the SmartStart client outline screen. (Please refer to the document titled The DT Max SmartStart input assistant for detailed information about this feature.)

The keyword Activity is also provided with a menu. If, however, the relevant description is not found in the list, a customized description may be entered in the option Regular corp. (specify activity). The keyword Product allows the tax preparer to detail the main products and services provided by the corporation.

The corporation's head office must be specified as well. The keyword Address heads a group of entries for all information pertaining to the company's head office, mailing address and location of books and records. Use the keywords Care-Of, Street, City, Province and PostCode to enter the relevant information. The tax preparer may use the keywords MailAddress, BooksAddress and SENDINSTAL to specify the address to be used for these locations, thus preventing the need to re-enter addresses that have already been provided. The keyword ContactName should provide the name of the person responsible for handling inquiries. The keywords Phone and Fax should be used to enter the relevant numbers.

The keyword Language allows the tax preparer to specify in which language the tax return should be printed. This only applies to the production copy of the tax return. The user still has the option to work and view the display in one language while designating another for printing.

The keyword IncorpDate is used to enter the date of incorporation. The keyword BeginDate indicates the beginning of the corporation's activities and is used for calculation purposes. If a corporation's beginning date has not been entered and it is necessary for calculation purposes, DT Max will default to the incorporation date as the beginning date.

The keyword Jurisdiction must be used at least twice. One entry will be necessary to provide the federal jurisdiction information (Bus-Number and SALESTAXACCT), whereas a second entry will designate a provincial jurisdiction. Multiple provincial jurisdictions may be entered when needed.

The group headed by the keyword CorpOfficers has multiple functions. It provides the information requested on the provincial jackets. It also allows you to designate a signing officer. To do so, you must select a combination among the options offered for this keyword. The Name, SIN and Title are to be entered in the appropriate keywords. The individual's address would be entered in the keyword Address-Offr, with specific information in City.e, Province.e, PostCode.e, Phone.offr, and Fax-Offr. Any signing date may be entered in the keyword SignDate, also found in this group.

The financial information necessary to complete the corporate income tax return is first entered in the GIFI group. The GIFI (General Index of Financial Information) is an extensive list of financial statement items where each has a unique code (e.g. cash is "1001"). Use GIFI to indicate the source for the data, i.e. whether it is entered directly into DT Max from financial statements or imported from third party software. For more information on entering GIFI data in DT Max, see General Index of Financial Information (GIFI).

Next is the group headed by the keyword NetIncome. This amount represents the net income (loss) per the financial statements. Adjustments to net income for tax purposes would be made by using the keywords Net-Inc-Add and Net-Inc-Ded, which have a menu of the most common adjustments, although a more specific adjustment may also be entered under Other (specify). The keywords Sales and GrossRevenue allow for the entry of the relevant information as requested on various provincial tax returns.

If the corporation makes a donation to a charity, use the keyword group Charity to enter the donation. Enter the actual amount and the charity number in the keyword Amount.ch.

A corporation's taxable capital information will be entered in the TaxOnCapital keyword group. At first, a question is asked as to whether or not the corporation is exempt from paying capital tax. The answer is usually negative. The keyword PaidUpCap includes a menu with a comprehensive listing of the various types of capital that are subject to capital tax. This keyword will be repeated until the tax preparer has completed the data entry and is ready to move on to the next relevant keyword.

A common item for most corporations is a capital cost allowance (CCA). Data entry begins with the keyword group CCA-Class. The tax preparer is first required to choose the appropriate class from the menu that comes with this keyword. Having done this, the opening undepreciated capital cost (UCC) should be entered in the keyword UCCOpen. If this is a new CCA class, then the cost of the asset should be entered in the keyword Additions. An [Alt+J] function is available for these keywords, allowing the tax preparer to detail different jurisdictional amounts. A description of the asset may be entered in the keyword Descript-UCC. In addition, the tax preparer may specify whether the half-year rule should apply by using the keyword HalfYr-CCA, and indicate the purchase of an asset in the keyword DateAcquired. Finally, the tax preparer can limit the amount of CCA claimed by using the keyword CCALimit.

A corporation may claim a deduction for instalments that it has already paid with the keyword group InstalPaid. This keyword comes with a menu allowing the tax preparer to specify the jurisdiction to which the data entered applies. The keyword TaxType-Inst also comes with a menu to identify the tax to which the payment applies. The keyword Descrip-Inst allows the tax preparer to choose the type of remittance, whereas Amount&Date allows the tax preparer to specify what amount was paid, and when. The keyword group InstalRec allows you to enter information required for instalments to be calculated for the next fiscal period.

The last group of keywords in a client's data is CorpHistory. Normally, this merely consists of a carryforward of relevant data from the corporation's previous year's tax return. However, a situation may arise where even though a corporation has been in existence for quite a few years, this is the first year that the tax preparer is handling its return or that the DT Max program is being used to that end. In either case, relevant keywords are made available to enter the data requested on the various forms of the tax returns or used in certain calculations. Data commonly carried forward may be the prior year's taxable income (TaxableInc), fiscal year-end (PriorYearEnd), and type of corporation (CorpType.his).