Updated: 2020-07-22
The Optimizations worksheet in TaxCycle T2 allows you to control optimizations in corporate tax returns, whether to optimize for minimizing or maximizing taxable income or to turn off optimizations altogether.
The Optimizations worksheet allows you to see and customize optimizations for the taxpayer.
When optimization are enabled, TaxCycle applies the deductions in the following order:
Read the following scenario to explain the various optimization goals.
Name of corporation | Company XYZ |
Net income from S125 | $12,000 |
Class 1, opening UCC | $987,986 |
Maximum available annual CCA ($987,986 x 4%) |
$39,519 |
The results of each optimization goal are:
TaxCycle applies the deductions in the following order:
The last option consists of first claiming the T2 jacket deductions, such as donations and non-capital losses, before claiming Schedule 1 deductions, such as CCA and CEC.
This option may be useful, for example, if a non-capital loss or donation is going to expire soon and you prefer to use them first and preserve as much CCA and CEC claim for the following year.
Explain this option, let's look at Company XYZ with some variations:
Name of corporation | Company XYZ |
Net income from S125 | $12,000 |
Class 1, opening UCC | $500,000 |
Maximum available annual CCA ($500,000 x 4%) |
$20,000 |
Non-capital loss due to expire soon | $11,000 |
By choosing to claim the non-capital loss first before CCA, TaxCycle will preserve as much future CCA as it can. The results are as follows:
To select this, choose Option 1 WITHOUT selecting sub-option a or b.