First, map every payer to the right taxpayer
The most common physician filing error is not a missed deduction; it is income reported by the wrong taxpayer. Anything you earned before your corporation held its Certificate of Authorization is personal income, even if the company existed on paper. A hospital stipend or medical directorship paid in your own name belongs on your T1 unless the contract genuinely runs to the corporation. We open every engagement by listing the payers, OHIP, group or AFP arrangements, hospitals, universities and insurers, and confirming who the legal payee is for each.
That map drives the paperwork. The MPC issues a T4 if you draw salary and a T5 for dividends; hospitals and faculties often issue T4As; some amounts arrive with no slip at all and still have to be reported. Nothing here is hard once it is mapped. Everything is hard when it is guessed at in April.
| Income stream | Typical paperwork | Whose return |
|---|---|---|
| OHIP billings assigned to the MPC | Remittance advice, no slip | Corporate T2 |
| Hospital stipend or directorship | Often a T4A | Follows the contract: T1 or T2 |
| Locum splits and daily rates | Contract plus host statements | T1 self-employment, or the MPC if it holds the engagement |
| Salary and dividends you take out | T4 and T5 the MPC files | Personal T1 |
Locum income deserves its own ledger
Locum work is paid every way at once: a percentage split with the host practice, a flat daily rate, direct billing under a locum arrangement, sometimes a travel allowance on top. We track each engagement as its own line, with its contract, its statements and its costs, so nothing is netted invisibly and nothing is taxed twice. Rural programs add premiums and honoraria on their own schedules, which makes engagement-level records the difference between a clean return and a shrug.
Costs follow the same discipline. Travel, lodging and licensing tied to an out-of-town engagement are generally deductible against that income when you carry on the work as a business; commuting to a regular workplace is not. Keeping the confirmations beside each engagement means the deduction survives a CRA question instead of dying in one.
For residents and new graduates doing locums before incorporating, CPA Quick Support at $99 a month is often the right size: unlimited questions, three topics a month and CRA letter review, without a full corporate engagement you do not need yet.
The MPC's T2 on a calendar that never surprises you
The corporate return is due six months after year-end, but the balance owing is due three months after year-end for a CCPC claiming the small business deduction, and instalments begin once federal tax passes $3,000. Miss that sequencing once and interest accrues quietly for months. Our Corporate Tax Filing engagement sets the calendar from your year-end and resets the instalment schedule after every filing.
The T2 also carries the schedules that matter later: CCA on exam-room equipment in Class 8 and computers in Class 50, shareholder loan continuity, and the investment-income figures that determine whether the grind on the small business limit is approaching. That last question is a planning problem more than a filing one, and it belongs with Tax Planning & Advisory before it shows up on a schedule.
One return most physicians never file is the HST return, because insured services are exempt. The exception is taxable uninsured work, medico-legal reports and cosmetic procedures past the $30,000 threshold, which we watch as part of the bookkeeping rather than discover at year-end.
Your T1 still does real work
Incorporation does not retire your personal return; it changes what flows into it. Salary and dividend slips from the MPC, CPSO membership dues and CMPA protection costs, deductible with the provincial reimbursement netted against the claim, plus RRSP contributions sized to the room your salary created. Dividends arrive with no tax withheld, so a dividend-heavy year usually means personal instalments; we calculate them instead of letting the CRA's mechanical reminders overshoot.
Where a spouse works in the practice or holds non-voting shares, we prepare the returns together so salary, dividends and credits are consistent across the household. Fees are quoted in writing after a free 15-minute discovery call, and the corporate and personal work is priced as one file because that is how we prepare it.
