FAQs

The Answers You Need

How long should I keep my tax records for?

Generally, you must keep all required records and supporting documents for a period of six years from the end of the last tax year they relate to - bookkeepers will help you with this.

I just started a business, do I have to file both a personal and business tax return?

This depends on the form of business ownership your company is registered as.

If your business is a corporation, you must complete a corporate (T2) tax return for the business in addition to completing a separate personal (T1) tax return. Keep in mind, non-capital losses/business losses cannot be used to reduce income on your personal tax return. However, if your books are maintained, it is possible for the non-capital losses of your corporation to be carried back or carried forward to apply against corporate income in other years.

If your business is either a sole proprietorship or partnership, the income or loss from your business can be included on your personal tax return. You will have to file a “Statement of Business Activities” (T2125 Tax Form) along with your personal income tax which includes an income statement for your business. In addition, if you have a loss from your business but you have other sources of income such as employment or investment income, then the business losses will reduce the other income on your tax return.

Do I have to register my business?

If you're a sole proprietor and plan on using your full legal name, you do not need to register for a business name. If you have a unique name you want to use for your business, you must register it.
Business registration will be effective for only 5 years and will have to be renewed. If you plan on changing your business name or type (sole proprietor, partnership, corporation, etc.) requires a new registration. Once registered, you will receive a Master Business License (MBL) - it will serve as proof of business name registration at financial institutions and in business transactions with the Ontario government.

FAQ: FAQ