File Accurately. Pay What You Owe —
Not a Dollar More.

A T1 is the personal income tax return filed by all Canadian individuals each year, including self-employed professionals and sole proprietors who report business income on their personal return using Form T2125 (Statement of Business Activities). If you are self-employed or run an unincorporated business, the T1 is your only tax return — your business income flows directly onto your personal return and is taxed at your marginal personal rate.

A T2 is the corporate income tax return filed by every incorporated business in Canada, regardless of revenue or whether the corporation made a profit. It is a completely separate filing from the T1. If you operate through a corporation, you file both: a T2 for the corporation and a T1 for your personal income — whether that income comes as salary, dividends, or a combination of both. The two returns have different deadlines, different tax rates (corporate rates are significantly lower for small businesses through the small business deduction), and different planning strategies. Understanding which applies to you is the starting point for any tax conversation.

The T2 return must be filed within six months after the end of your corporation's fiscal year. Unlike the personal T1, which has a fixed June 15 deadline for self-employed individuals, the T2 deadline depends entirely on your fiscal year-end. If your fiscal year ends March 31, your T2 is due September 30. If it ends September 30, your T2 is due March 31.

However, filing the T2 is separate from paying your tax. Any balance of corporate tax owing is due within two months of the fiscal year-end for most corporations. Canadian-Controlled Private Corporations (CCPCs) that claimed the small business deduction in the current or prior year have a three-month payment deadline. Interest at the CRA's prescribed rate — compounded daily — begins accruing immediately after the payment deadline, even if the return itself is filed on time. A late payment can cost significantly more than a late filing, so we track both deadlines separately and flag them well in advance. There is no reason to be surprised by either one.

Yes — and in fact, if you own a corporation and draw income from it, you are required to file both. They are entirely separate obligations. Your corporation files its own T2 reporting corporate income and paying corporate tax at the corporate rate. You then personally file a T1 reporting whatever you received from the corporation: salary (reported on a T4 slip the corporation issues to you), dividends (reported on a T5 slip), or a combination of both.

The interplay between the T1 and T2 is where compensation planning matters most. How you pay yourself affects your personal marginal tax rate, your CPP contributions, your RRSP contribution room, and the total tax burden across both the corporation and yourself personally. Many incorporated business owners use a mix of salary and dividends to balance these factors. We support the bookkeeping required for the T2, coordinate T4 and T5 slip preparation, and work with your CPA to ensure your personal T1 reflects your total compensation picture correctly.

The documents we need depend on whether we are preparing a T1, a T2, or both. For a T2 corporate return, we need your year-end financial statements (or we produce them as part of our service), a list of any asset additions or disposals during the year, details of any shareholder loans, dividends declared, and any CRA correspondence about the corporation.

For a T1 with business income, we need your income and expense records or bookkeeping data, any T4 or T5 slips you received (from employment, investments, or your own corporation), home office details if you work from home (size of workspace as a percentage of total home area, plus your annual rent, mortgage interest, utilities, and insurance), and vehicle details if you claim automobile expenses (total kilometres driven during the year plus business kilometres, supported by a logbook). We send you a customized document checklist at the beginning of the process so you know exactly what to gather — most documents can be uploaded securely through your client portal without any in-person visits.