T2 Reasonableness Calculation

T2
1

One thing we do in most of our T2 files is a reasonableness calculation. I wonder if this is something that Taxcycle might be able to create a schedule.

For example if someone has $200,000 taxable income, 150,000 qualifying for SBD, 50,000 investment income and there was a $30,000 taxable dividend paid to shareholders. We would anticipate

SB Rate $150,000 x 12% 18,000
Investment Income 50,000 x 20% 10,000
-----------
Tax Provision 28,000

Refundable portion of Part I 50,000 x 30.666 15,333
Dividend Refund 30,000 x 38.333 -11,500
Net increase in RDTOH 3,833

Taxes Payable net of Dividend refund 31,833

The calculation helps us to cut through the long calculation to better understand the tax provision and the tax bill.

Hope you could do something like this.

Thanks

Garth

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2

@garth Thanks for your suggestion. I will log this idea in our system.

Steven

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3

I like your suggestion @garth. Some of that info is on the T2 Summary worksheet, but if you want to show “Refundable taxes paid” (the 15,333 in your example) on the client’s retained earnings statement (separate from the Tax provision on the income statement), you have to search for it in the T2 (p.6?), or calculate it. Would be nice if at least that number showed up on the T2 Summary…

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