Client Overview: A corporation with an associated company, facing complexities in allocating the Small Business Deduction (SBD) limit.
Challenges:
- Incorrect SBD allocation by the associated company’s accountant resulted in higher taxes for both corporations.
- Potential for CRA non-compliance and overpayment of taxes.
ClearWealth Accounting’s Approach:
- Identified the misallocation and communicated the issue clearly to the client.
- Worked with the CRA to amend the associated company’s T2 return and correct the SBD allocation.
- Filed an accurate T2 return for the client, ensuring compliance and optimizing their tax position.
Results:
- Reduced tax liabilities for both the client and the associated corporation.
- Ensured accurate reporting and compliance with CRA regulations.
- Provided the client with a clear understanding of CCA and accounting depreciation.
Conclusion:
ClearWealth Accounting Advisors proactively identified and resolved a costly SBD allocation error, delivering significant tax savings and peace of mind for the client. Contact us today for expert assistance with your corporate tax needs.
