Canadian Taxes: A Guide to the T5013 Partnership Income Form
Partnership operators in Canada must file the T5013 partnership income form if their income is above a certain threshold. If you run a partnership, here is what you should know.
Tax Form T5013
Form T5013, or the Statement of Partnership Income, is a document that partnerships use to report their financial status to the Canada Revenue Agency (CRA). Such businesses don’t pay income tax, and the CRA doesn’t use the information provided to calculate a business’s tax liability. It only shows the CRA the amount of income or loss to include on the tax returns for each partner.
Which Entities Are Partnerships?
A partnership, according to the CRA, is an association of at least two individuals, trusts, or corporations than come together to do business or trade. An example is a group of people who contribute finances, property, or skills expecting some return but haven’t incorporated. Most such entities have formal agreements outlining the partners and describing how they share income and equity.
Who Files Form T5013?
Partnerships operating in Canada and those that partner with Canadian or foreign operators have to file a partnership information return. Any of the following four conditions make partnerships subject to submitting Form 5013.
- The sum of revenues and expenses for a fiscal period exceeds $2 million
- The business has tangible and intangible assets worth more than $5 million worldwide
- Tiered partnerships, where the entity is a partner in another partnership or has another partnership as a partner
- The business has a trust or corporation as a partner
Completing the Partnership Information Return
Filing a partnership information return begins with completing form T5013-FIN. It has three sections — partnership information, documents to attach, and additional and miscellaneous information.
The second step is filling out the T5013 schedules relevant to the partnership. They include T5013 SCH 1, T5013 SCH 50, T5013 SCH 100, T5013 SCH 125, T5013 SCH 140, and T5013 SCH 141. The schedules are quite complicated, and it’s advisable to enlist the services of a tax professional.
Next, you need to fill out a T5013 partnership income form for each partner. Lastly, you must complete a T5013SUM for the whole partnership.
Submitting Form T5013
You require a partnership account number (RZ number) to send your partnership information return. To submit, use My Business Account or let a representative file it for you. You can as well utilize the Web forms provided by the CRA.
Get Your Form T5013 right
Filing T5013 partnership income form requires some accounting knowledge. You also need to have your financial books and statements at hand. If you are seeking an experienced accounting partner to help you take your business to the next level, contact us.
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