2017-03-08 00:00:00 Taxes English File your corporate taxes using the General Index of Financial Information to comply with Canadian regulations and streamline your paper or... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/Man-holding-tablet-views-financial-information.jpg https://quickbooks.intuit.com/ca/resources/taxes/benefits-using-general-index-of-financial-information/ The Benefits of Using the General Index of Financial Information

Benefits of Using the General Index of Financial Information

3 min read

The General Index of Financial Information (GIFI) categorizes financial line items by four-digit codes. With the exception of insurance companies, all corporations filing T2 or T5013 forms must use this classification index when filing financial statements.

By using the GIFI, you can file financial information on your original statements unless the Canada Revenue Agency (CRA) requests them directly. Properly applying GIFI codes ensures compliance with tax regulations and finance laws, and helps you verify balances while reducing the risk of triggering a CRA business audit due to errors in your reporting.

General Index of Financial Information in Certified Tax Preparation Software

CRA-certified corporate or partnership tax software packages incorporate GIFI codes into the software, which is why you should use a CRA-approved tax software package, such as TurboTax, to ensure compliance with the law and to have accurate information for the tax agency. Some utility programs convert your statements to comply with GIFI coding when exporting data into your Canada corporate tax forms from other apps, such as business expense trackers.

GIFI Short Form

If you aren’t using tax preparation software, you must refer to the CRA forms, schedules, and guides to obtain proper codes for each financial statement item. For a list of the most common items, you can reference Form T1178. If you’re filing for a corporation but aren’t using software to prepare your return and have gross revenue and assets totaling less than $1 million each, you must file Form T1178 as of October 2018. If you can’t find the code you need on the short form, reference a comprehensive list on the CRA’s RC4088 guide to the GIFI.

GIFI Schedules for Corporations and Partnerships

GIFI schedules let you submit your opening and closing balance sheets and income statements, with spaces to enter the GIFI codes and amounts for each line item. Refer to Schedules T2SCH100 and T2SCH101 for reporting balance sheets, and T2SCH125 for your income statement. If you operate a partnership, use T5013SCH100 for your balance sheet and T5013SCH125 for your income statement. These schedules provide a helpful list of common codes for each statement. You must enter the same number of line items on the schedules as you have on your own financial statements and provide a GIFI code for each one. But you don’t need to include the information for individual accounts or sub-accounts that feed into your financial statements.

GIFI codes act as a numeric classification system that keeps your essential information organized so that computer programs can access your data much easier. For example, if you pay business taxes for your small business, you’d include a line item in your statement that refers to GIFI code 8762. The line item for government fees is 8764. On a balance sheet or tax form submission, the sum of those two figures is reported next to the line item for GIFI code 8760, or business taxes, licences, and memberships.

Organize Your Records and Balance Your Books Using GIFI

GIFI groups the codes into categories, including assets, liabilities and income, offering a convenient way to organize your bookkeeping. Simply assign each accounting item the proper code, then sort them numerically to organize your books by category and subcategory. This also helps you determine whether your books balance properly by offering easy subtotaling. This way, you can verify that your assets and income equals your revenue minus expenses as a way to monitor your cash flow.

GIFI codes streamline your bookkeeping and help you verify balances, and they also ensure proper filing compliance at tax time, saving you from the hassle of audits and submitting additional documentation. Both short and comprehensive CRA forms utilize handy software, such as QuickBooks, and GIFI tables to make it easier than ever to use these codes. GIFI codes are especially helpful as you monitor the financial health of your firm and seek out the best possible tax situation every year.

Using GIFI codes is just one way you can optimize your small business. QuickBooks Online can help you maximize your tax deductions so you can keep more of what you earn today.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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