An income statement, or profit and loss statement, reports a business's revenue and expenses over a period, ending in net profit or loss.
The income statement covers a period, a month, quarter or year, and works top to bottom: revenue, less cost of goods sold to get gross margin, less operating expenses to get operating profit, less interest and tax to reach net income. It answers the fundamental question of whether the business made money.
Along with the balance sheet, the income statement feeds the GIFI schedule on the T2 return, so its figures flow directly into your corporate tax. Because it shows performance over time, comparing income statements across periods reveals trends in sales, costs and profitability.
A company reports $500,000 revenue, $300,000 cost of goods sold, $150,000 operating expenses and $10,000 tax. Its income statement shows $40,000 net income for the year.
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Income tax is tax charged on the income you earn in a year, levied by both the federal government and your province or territory. Rates are graduated, so successive slices of taxable income are taxed at higher rates, and credits such as the basic personal amount reduce the tax calculated. Employment income is taxed through payroll withholding and settled on your T1 return. Quebec residents also file a separate provincial return with Revenu Quebec.
Multiply the assessed value of the property by the tax rate for its property class. Assessment is set by a provincial assessment authority on its own cycle and increases are often phased in, so the value lags the market. The rate is set each year by the municipality out of its budget, with an education portion added by the province. Both figures appear on your notice, which is why identical homes in different municipalities carry different bills.
Line 23600 is net income on the T1 return, being total income less deductions such as RRSP contributions, union dues, childcare and support payments. It sits above taxable income, which is calculated further down after additional deductions. Net income matters because the CRA uses it to test income-tested benefits and credits, including the Canada Child Benefit and the GST/HST credit. You will find the figure on the return itself and on your notice of assessment.
Open the forms and publications section of canada.ca, search by form number or title, and choose the PDF for the tax year you need, because forms change from year to year and prior-year versions stay available in the same place. Most personal filers need no printed forms at all, since software approved for NETFILE builds the T1 and transmits it. Paper filers should print the version for their province or territory of residence.
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Ex Big 4 — Ernst & Young, Deloitte · International & cross-border tax specialist · CPA Canada (In-Depth Tax Program) · Chartered accountant, ICAI & MIA
Udit Gupta has over 15 years of experience helping corporations and business owners with corporate structuring, corporate tax filing, bookkeeping, payroll, GST/HST, cross-border tax and CRA representation. Big 4 trained at Ernst & Young and Deloitte, and qualified as a chartered accountant in India and again in Malaysia, he founded his accounting practice in 2014 to serve entrepreneurs, startups and non-resident business owners across Canada. View full member bio.
The Institute of Chartered Accountants of India — member 521458 · Malaysian Institute of Accountants — member CA 44667 · Ex Big 4: Ernst & Young, Deloitte · CPA Canada (In-Depth Tax Program), completed 19 Dec 2023 · In-Depth GST/HST Part I, 12 Jul 2022 · Part II, 5 Jul 2023
Editorial policy. Every page is researched against primary sources — the Income Tax Act, CRA publications and CPA Canada guidance — and every rate or threshold is stated with the tax year it applies to.
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