What are financial statements? Will they be included in my corporate tax returns?
Financial statements are a set of documents that show your company’s financial status at a specific point in time.
There are two main financial statements that must be included in your corporate tax returns:
- The balance sheet, which shows the company’s financial situation at a given point of time (usually at the day of company year-end)
- The income statement, which shows the company’s financial performance over a period of time (usually a year).
I paid my myself a dividend, will it reduce my corporate tax?
Normally, your corporate tax won’t be reduced by paying a dividend. This is because dividend payments are not expenses, and they don’t reduce the company’s net profit. They are a distribution of profits.
The exception is if your company had investment income and paid a higher tax for the investment income. By issuing a dividend, your company will get a dividend refund.
My mortgage brokerage company made 200k net profit last year. Do I have to pay all the profit out as a dividend?
No, you don’t have to pay all profit out as a dividend. You can choose the amount you would like to pay yourself as a dividend. The remaining amount will be recorded as retained earning, which you may need to pay out as a dividend in the future.
I took money out from my business account to pay myself a dividend and reimburse myself for my home office expenses. How do I calculate and report the dividend amount?
The total dividend amount should be the total payout from business account minus the reimbursement.
I bought a truck and use more than 90% of the time for my construction business. Why can’t I find the expense on the income statement?
Vehicle will be recorded as capital asset in the balance sheet. Only a percentage can be claimed as an expense each year on the income statement because it will last many years.
