Business experience report: Amending my T2 corporate tax return

I’m still figuring out how to calibrate my stress level when it comes to accounting and paperwork. While reconciling my business credit card statements, I realized that I had double-entered my September credit card charge from WIND Mobile. Correcting the mistake meant fixing last fiscal year’s corporate tax and sales tax returns. Digging into my records, I noticed that I was also missing a few months of bills from Fido, my previous cellphone provider. I’d forgotten to download the electronic statements before moving to WIND Mobile, and once that went through, I didn’t have access to the system. Meep!

“I am definitely not panicking,” I said. “No, sirree.” I took a deep breath and researched the process for amending a T2 corporate tax return. It involved sending a letter to my tax centre. The HST return was much easier to adjust: just change the numbers through the Canada Revenue Agency website. After updating my numbers in Quickbooks and TurboTax, I drafted a letter with the particulars. I hunted down the schedule form and the line items that needed to be changed.

Then I spent an hour working on avoiding the same problem in the future. I downloaded all the other statements I could get my hands on and setting up my routines so that I’d get a reminder to do this quarterly. I also added a checklist for when I’m closing accounts or moving to another company: remember to download statements!

The following morning, I called Fido to find out if I could get electronic copies of my bills. The agent told me that the electronic copies were deleted when my account was closed, but that I could request paper bills for $4 each. Since I probably wouldn’t be saving that much more by claiming it, I decided to remove the missing months from my tax claim.

Then I called the Canada Revenue Agency. The agent confirmed my understanding of the process for amending the T2 corporate tax return – send a letter with the items to change. In my case, I didn’t have to attach all the bills for the telephone; if they wanted additional documentation, they could ask. Yes, I could remit the payment beforehand in order to minimize interest. I told the agent that it probably came out to a difference of $30 or so. I asked, “Should I be majorly stressing out over this or minorly stressing out?”

The agent laughed and said, “It’s no big deal. Don’t worry.”

This is what I mean by calibrating my stress level. There are so many things I’m still figuring out. If I stress out too much, it’s expensive. (Get an accountant to chase all these little things down? That would probably cost more than the tax savings.) If I stress out too little, that can be expensive in terms of time and money and well-being too. Talking to people helps. I want to know what I should be paying attention to, and what can be sorted out later on.

The other thing I have to remember is that this doesn’t have to be that scary. The CRA reassessed my tax return for an extra $146, but they weren’t intimidating about it. I’m up front about the fact that I’m learning, but prospects and clients are cool with the experiment. The consequences of making mistakes are not as earth-shattering as my lizard-brain sometimes fears they are. As I learn to trust, I’ll be able to try things out more freely.

Learning from other people’s experiences helps a lot. I occasionally browse through small business forums and blogs for glimpses into other people’s adventures. I need more stories of uncertainty and starting out, I think. There’s this temptation to gloss over the rough spots, to present an image of smooth running.

I like hearing stories like how my parents carefully, carefully considered their equipment investments back when they were starting out their studio in the tight import-controlled environment of the Philippines in the 1980s. Do they buy this piece of equipment and risk that their capital gets tied up in something that lies unused if the jobs aren’t there? Do they pass on it, taking the risk that if they decide they do need it, it’ll no longer be available? I want stories of figuring things out.

Some people tell me that they like these business experience reports. If you like these experimental observations, can you recommend any other people that I should be reading too?

  • J E

    Hi Sacha,

    My approach to accounting is that I never pay any cash or keep any of the company money in cash. l always use a debit card or online banking payments. In this way, I can always see my transactions from my banking statement. 

    Alas, once every month I print out the online banking statement for my bank accounts (three of them) for the last month and I start doing entries into the books. Nothing will be missed, because all transactions are there.

    When I find that a voucher is missing (because there is a transaction on the banking statement, but I do not physically have it in my binder) I just try to find it, or, if there is none to be found, I print out the particulars of the transaction from the banks web and use it as the voucher.

    Works for me anyway.

    Cheers!

    /J

    • http://sachachua.com sachac

      Yup, I try to make most of my transactions electronic too. =)

      I just got the CRA letter – I owed an additional $20 in tax, which was well-covered by the sum I paid them in advance.

      Thanks for sharing your experience!

      Sacha Chua Tel: +1 647 547 9436 – Mobile: +1 416 823 2669
      http://experivis.com – Turning experiences into visuals http://livinganawesomelife.com – Life, experiments, and everything

  • lee

    Sacha,
    You’re very smart.  Don’t stress out on this.  You’re doing good with the paperwork.  Just make sure to turn in the forms and money. Don’t worry about tax savings for now because most likely it’s not worth the work and detail record keeping.  If you turn in the forms and money, you’re good to go. 

    • http://sachachua.com sachac

      Yup. Optimizing for peace of mind! =)