Short answer: Tax at Bronte Bay is not just about filing returns — it is about paying the least tax legally possible, on time, every year. We provide corporate tax (T2), personal tax (T1), HST/GST filing, SR&ED claims, payroll tax compliance, and CRA audit support for businesses and professionals across Toronto and Canada — with year-round planning, not just year-end scrambling.Most businesses overpay tax — not because they are dishonest, but because they are not planning. They file their return after the year is closed, when every decision that could have reduced the bill has already been made. At Bronte Bay, tax planning happens throughout the year — before the fiscal year closes, before income is earned, before the decisions that create the tax obligation are locked in. Nearly 40 years of Canadian CPA experience means we know the rules in detail — the rates, the deductions, the credits, the deadlines, and the CRA’s audit priorities. Here is exactly what we do.
Corporate Income Tax (T2)
Every Canadian corporation must file a T2 corporate income tax return within six months of its fiscal year-end. Late filing attracts a 5% penalty on the unpaid tax balance plus 1% per month — costs that are entirely avoidable. Bronte Bay prepares and files your T2 accurately and on time, every year. But filing the return is the last step. The real work — the work that determines how much you actually owe — happens throughout the year:| Corporate Tax Planning Area | What Bronte Bay Does | 2026 Ontario Rate |
|---|---|---|
| Small business deduction | Protect eligibility for the small business rate on the first $500,000 of active income; plan around the threshold as you grow | 12.2% combined federal-provincial |
| General corporate income | Income above $500,000 or passive income — minimize through timing, structure, and deduction optimization | 26.5% combined federal-provincial |
| Salary vs. dividend optimization | Model the optimal owner compensation mix to minimize combined personal and corporate tax while maintaining RRSP room | Depends on personal income |
| Capital Cost Allowance (CCA) | Strategic CCA timing — claim more in high-income years; defer in low-income years; apply Accelerated Investment Incentive (AII) on new equipment | Varies by CCA class |
| SR&ED investment tax credits | Identify qualifying R&D activities, set up documentation, prepare T661 claim — 35% refundable for CCPCs on up to $6M in eligible spending | 35% refundable (CCPC) |
| Year-end income timing | Timing of invoices, expenses, and bonuses before and after fiscal year-end to optimize tax in the current and following year | Varies by year |
Personal Tax (T1) for Business Owners and Professionals
For incorporated business owners, your personal T1 return does not exist in isolation — it is one half of a coordinated personal and corporate tax plan. The salary/dividend split you take from your corporation, your RRSP contributions, your investment income, and your rental properties all interact. Getting the personal return right requires understanding the whole picture.T1 Filing for Incorporated Owners
- Employment income (T4) from your corporation — salary portion of compensation
- Dividend income from your corporation — eligible and non-eligible dividends taxed at different rates
- RRSP deduction optimization — maximizing RRSP room generated by salary income
- Investment income — interest, dividends, and capital gains from personal portfolios
- Capital gains on property or asset dispositions — including principal residence exemption claims
T1 Filing for Self-Employed and Unincorporated Professionals
- Form T2125 — Statement of Business or Professional Activities; net income after all deductible expenses
- CPP contributions — both employee (5.95%) and employer (5.95%) portions, plus CPP2 on earnings above the YMPE
- Home office, vehicle, and all other eligible self-employment deductions
- Quarterly tax instalment planning — avoiding CRA interest on underpayments
- HST registration timing and filing for professionals crossing the $30,000 threshold
Key T1 Deadlines
| Taxpayer Type | Filing Deadline | Payment Deadline |
|---|---|---|
| Employed individuals | April 30 | April 30 |
| Self-employed individuals and their spouse | June 15 | April 30 — tax owing must still be paid by April 30 to avoid CRA interest |
| Incorporated owners receiving salary/dividends | April 30 | April 30 |
HST/GST Filing and Compliance
HST is mandatory once your taxable revenue exceeds $30,000 in a single quarter or four consecutive quarters. The CRA charges 3%–10% penalties for late remittances plus compound daily interest — costs that grow quietly until they are discovered. Bronte Bay tracks HST collected and input tax credits (ITCs) throughout each filing period in Xero and remits on time, every time.- HST registration — advice on voluntary vs. mandatory registration and optimal timing for your business model
- Tax code configuration — correct Xero setup for taxable, zero-rated, and exempt supplies specific to your industry
- ITC maximization — every eligible input tax credit claimed; missed ITCs are money left on the table
- Monthly, quarterly, or annual filing — filed and remitted to CRA on time per your assigned frequency
- Industry-specific HST rules — HST exemptions for medical services, financial services, and long-term residential rentals; zero-rating for exports and services to non-residents
- Retroactive HST correction — if you crossed the threshold without registering, we manage the voluntary disclosure process to minimize penalties
SR&ED Tax Credits — Canada’s Most Underused Business Incentive
The Scientific Research and Experimental Development (SR&ED) program is Canada’s largest business support program, distributing $4.5 billion annually in tax credits. Canadian-controlled private corporations (CCPCs) receive a 35% refundable investment tax credit on up to $6 million in eligible R&D expenditures — meaning you receive a cheque from the CRA even if you owe no corporate tax. Most businesses that qualify are not claiming. Qualifying activities include software development, product prototyping, manufacturing process improvement, and applied research — you do not need a dedicated research lab. Bronte Bay identifies eligible activities, sets up the contemporaneous documentation system required to support the claim, and prepares the full T661 and Schedule 31 at year-end.Payroll Tax Compliance
Payroll deductions — CPP, CPP2, EI, and income tax — must be calculated correctly at current CRA rates and remitted to the CRA on time. Late or incorrect remittances attract CRA penalties and interest that accumulate quickly. Bronte Bay runs payroll through Wagepoint, integrated with Xero, ensuring:- CPP (5.95%), CPP2 (4% on YMPE to YAMPE), and EI (1.64%) calculated at 2026 CRA rates
- Provincial income tax deductions calculated correctly for Ontario and other provinces
- CRA payroll remittances — monthly, quarterly, or accelerated — submitted on time
- T4 slips prepared and filed by the February 28 deadline
- Records of Employment (ROEs) filed when employees leave
- Employer health tax (EHT) — Ontario EHT calculated and remitted for employers with annual Ontario payroll above $1,000,000
CRA Audit Support and Voluntary Disclosure
A CRA review, audit, or reassessment requires organized, accurate records and professional representation. Bronte Bay supports clients through all types of CRA correspondence and examination:- CRA audit representation — we liaise directly with the CRA on your behalf; you do not deal with the auditor directly
- Document preparation — organized, reconciled records produced promptly; clean Xero books make CRA reviews straightforward
- Notice of objection — if you disagree with a CRA reassessment, we prepare and file a formal objection within the 90-day deadline
- Voluntary disclosure program (VDP) — if you have unfiled returns or unreported income, the CRA’s VDP allows you to come forward proactively and reduce or eliminate penalties and prosecution risk
- Taxpayer relief applications — where CRA penalties or interest arose from circumstances beyond your control, we prepare taxpayer relief requests to have them waived
📋 CPA Note: The businesses that fare worst in CRA audits are those with disorganized records — not those with the most complex situations. A business with clean, current Xero books, receipts attached in Hubdoc, and reconciled bank statements can respond to almost any CRA inquiry quickly and confidently. This is the single most practical benefit of maintaining proper books throughout the year rather than scrambling at tax time.
Key Canadian Tax Deadlines — 2026
| Deadline | Obligation | Penalty for Missing |
|---|---|---|
| February 28 | T4, T4A, T5 slips filed with CRA and distributed to recipients | $100–$7,500 depending on number of slips and days late |
| April 30 | T1 personal tax return (employed); all personal tax payments including self-employed | 5% of balance owing + 1%/month; daily compound interest on unpaid amounts |
| June 15 | T1 filing deadline for self-employed individuals and their spouse (payment still due April 30) | 5% late-filing penalty if balance owing; interest from April 30 |
| 6 months after fiscal year-end | T2 corporate income tax return | 5% of unpaid tax + 1%/month; minimum $100 failure-to-file penalty |
| 2 months after fiscal year-end | Corporate tax instalment balance payment (3 months for CCPCs meeting certain conditions) | Arrears interest at prescribed rate + 4% |
| Mar 15, Jun 15, Sep 15, Dec 15 | Quarterly personal tax instalments (if owing more than $3,000 in prior years) | Instalment interest at prescribed rate + 4% |
| Monthly or quarterly | HST/GST returns and remittances per CRA assigned frequency | 3%–10% late remittance penalty + daily compound interest |
Frequently Asked Questions
Canadian-controlled private corporations (CCPCs) that qualify for the small business deduction pay a combined federal-provincial corporate tax rate of 12.2% in Ontario on the first $500,000 of active business income in 2026. Income above $500,000 is taxed at the general corporate rate of 26.5% in Ontario. Passive income (investment income earned inside a corporation) is taxed at approximately 50.17% in Ontario — not the 12.2% small business rate.
Your T2 corporate income tax return is due within six months of your fiscal year-end. For a corporation with a December 31 fiscal year-end, the T2 is due June 30. The tax payment itself is generally due two months after year-end (three months for CCPCs meeting certain conditions). Filing late attracts a 5% penalty on the unpaid tax balance plus 1% per month — avoidable costs that Bronte Bay eliminates by filing on time every year.
The SR&ED (Scientific Research and Experimental Development) program is Canada’s largest business support program, distributing $4.5 billion annually in tax credits. CCPCs receive a 35% refundable investment tax credit on up to $6 million in eligible R&D expenditures — a cheque from the CRA regardless of whether tax is owing. Qualifying activities include software development, product prototyping, manufacturing process improvement, and applied research where technological uncertainty existed. Bronte Bay identifies eligible activities, sets up the documentation system, and prepares the full claim at year-end.
The CRA charges a late remittance penalty of 3% if one to three days late, 5% if four to seven days late, 7% if eight to fourteen days late, and 10% if fifteen or more days late — plus compound daily interest on the outstanding amount from the due date. A second late remittance within a 12-month period increases the penalty to 20% for the fifteen-or-more-days category. These penalties accumulate quietly until discovered, often adding thousands to a business’s CRA balance. Bronte Bay files HST returns on time every filing period — this is one of the most straightforward compliance costs to eliminate.
Yes. If you have one or more years of unfiled T1 or T2 returns, the best approach is to file voluntarily as quickly as possible — the CRA’s Voluntary Disclosure Program (VDP) allows taxpayers who come forward proactively to reduce or eliminate penalties and avoid prosecution risk. Bronte Bay manages voluntary disclosures regularly and can reconstruct prior-year financial records, prepare the missing returns, and submit the VDP application on your behalf. The sooner you address unfiled returns, the more options are available to you.
As an incorporated business owner, you choose how to pay yourself — salary (which attracts CPP deductions and generates RRSP room), eligible dividends, non-eligible dividends, or a combination. Each option has different personal and corporate tax implications. The optimal mix depends on your total income, RRSP contribution room, family situation, and corporate cash needs. At Bronte Bay, we model the after-tax outcome of different compensation mixes annually — typically identifying $5,000–$20,000 or more in annual combined personal and corporate tax savings compared to an unoptimized compensation structure.