Personal Finance

Already filed my personal income tax, should I file a nil return for my corporation?

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  • Feb 2nd, 2018 9:49 am
[OP]
Newbie
Jan 28, 2018
8 posts

Already filed my personal income tax, should I file a nil return for my corporation?

I incorporated back in Sept 2016 and now it's time to file the first T2 return.

I've decided to count the 2017 income as my self-employment income, given that is it fine that I file a nil return for my first corporate tax year?

Thanks in advance if anyone has been in the same boat before!
11 replies
Deal Fanatic
User avatar
Jan 27, 2007
5077 posts
936 upvotes
Peterborough
If the Corporation had no activity in the fiscal year, then a nil return is appropriate.
[OP]
Newbie
Jan 28, 2018
8 posts
dutchca wrote: If the Corporation had no activity in the fiscal year, then a nil return is appropriate.
Well, technically the corporation had activity and income, it's just that the income went into my personal bank account and I just opened our corporate bank account after the fiscal year ended.

I want to report as self employed income because I still have tuition credits that I can use.

I figured that it would be very weird if I had to pay tax once on personal income tax and once again on corporate T2 tax. So just confirming here that a nil return is appropriate when the sole owner of the business made money and reported as personal income? I guess that's the same as the corporation had no activity in the eyes of CRA.
Deal Fanatic
User avatar
Jan 27, 2007
5077 posts
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Peterborough
Did you collect hst under the corporate bn?
Deal Expert
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Aug 18, 2005
20085 posts
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Burlington-Hamilton
I thought it was always necessary to file HST, even if you collected zero dollars.
- casual gastronomist -
Sr. Member
Mar 3, 2009
884 posts
353 upvotes
Ottawa, ON
Jucius Maximus wrote: I thought it was always necessary to file HST, even if you collected zero dollars.
If the corporation does not register for HST (revenue under 30k) then nothing to file.
Sr. Member
Mar 3, 2009
884 posts
353 upvotes
Ottawa, ON
silvericat wrote: I've decided to count the 2017 income as my self-employment income
You cannot "decide" anything. If the corporation invoiced your clients it's revenue for the corporation.

If you personally invoiced your clients it's personal income.

It's very cut and dry. You and the corporation are two completely seperate entires; like 2 different people.
[OP]
Newbie
Jan 28, 2018
8 posts
dr_torch wrote: You cannot "decide" anything. If the corporation invoiced your clients it's revenue for the corporation.

If you personally invoiced your clients it's personal income.

It's very cut and dry. You and the corporation are two completely seperate entires; like 2 different people.
I didn't invoice anything; I sell software as a service.

As I mentioned the corporation bank account just got set up a few months ago, so the majority of 2017 income went into my personal account, which is why I'm going to file personal income tax for it.

Sorry "decided" might be the wrong word. I meant to say that I figured it's most appropriate to file income tax.
Deal Fanatic
User avatar
Jan 27, 2007
5077 posts
936 upvotes
Peterborough
To me it sounds like you were acting as a person outside the corporation. If you had issued invoices and collected hst in the name of the corporation, my opinion would most likely be different.
Sr. Member
Mar 3, 2009
884 posts
353 upvotes
Ottawa, ON
silvericat wrote: I didn't invoice anything; I sell software as a service.
When you sell something you issue an invoice for payment or a receipt for payment (or both); if you invoice or receipt state that the goods or services were from silvericat then it's personal income.

If the invoice or receipt state that the goods or services were from XYZ Inc. then it's corporate revenue.

That's it - it's clear cut. If the invoice or receipt came from the corporation then there is corporate income.
Penalty Box
Jun 24, 2015
4723 posts
1396 upvotes
0 downvotes
he probably thinks because he deposited the money in his personal account its not corporate income
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