Personal Tax Returns:
Personal tax is one of life’s necessary evils, BUT it doesn’t have to be so painful. If you are prepared and organized, filing your annual personal tax return can be a breeze. It just takes some practice. We take pride in explaining information to our clients as simply as possible so that they can better understand their tax situation and the impact that various decisions may have on their return. The deadline for personal tax returns is April 30th, unless you or your spouse is self-employed in which case you have until June 15th to file. However, if you are self-employed and owe taxes, the CRA will begin to charge you interest from May 1st even though the tax return is not due until June 15th.
We can help with your various sources of income on your personal tax filing:
- Self-employed businesses (sole-proprietorship)
- Partnership income
- Employment expenses (commission and salary)
- Investment income Rental properties
- Non-resident tax returns
- 216 Non-Resident rental properties
- T1135 Foreign Income Verification Statements
- Coordination of Canadian and US tax returns
For your convenience, we have prepared a personal tax checklist to consult before you bring us your information. This will help us to complete your return as fast as possible.
Personal Return Checklist:
- Last year’s notice of assessment
- Last year’s tax return (if not prepared by our office)
- Any letters from Canada Revenue Agency
- Change in address, marital status, new children, etc
- Instalment payments
- T2200 (employment expenses)
- T2202A (tuition receipt)
- Revenue and expense (self-employed, partnership, rental property)
- Commission and/or employment expenses
- Foreign income Capital gain/loss report
- Medical receipts (travel for medical)
- Fitness and activity receipts
- Donation receipts
- Disability forms
- Babysitter, daycare, day camp
- Overnight camp
- Student loan interest
- Rent receipts
- Property tax Management fees on investments
- Moving expenses
- Spousal support paid or received
- Certain Legal fees
Corporation Tax Returns:
We offer complete income tax services for businesses, including regular tax return preparation.
When you do not comply with CRA requests to file tax returns, eventually they will file them on your behalf, and in almost all instances the balance that they determine is owing will be higher than what would be owing if you filed the tax return yourself. Arbitrary assessments occur for all types of tax returns whether it be personal, corporate, GST/HST or payroll. The scary part of an arbitrary or notional assessment is not just the large balance owing, it is what happens next.
Once the CRA has decided to arbitrarily assess you, there is a balance owing on your account and your file will now be passed along from Non-Filing to Collections. Once a collections officer is assigned to your account, it is fair game for them to try and collect on the balance even though you may insist that you would owe much less or nothing at all. All the regular powers that the CRA collections department has are applicable.
If you go ahead and file your tax returns, the arbitrary balances will be erased and replaced with your actual tax figures.. Even the penalties and interest associated with the arbitrary returns will be re-calculated based on your filing. This is only an option for a certain period of time. If you do not file your tax returns within the time frames discussed below, the arbitrary balances stand and you actually owe the money and cannot do anything about it (exceptions made for very specific circumstances only).
For a corporation, the time frame to replace an arbitrary tax return is as long as the return has not gone statute barred. When the date of the notice of assessment reaches three years, that tax return is considered statute barred and cannot be examined again by CRA unless there is a misrepresentation in the return such as fraud. At the present time, they have been allowing personal tax returns to be filed back for ten years.
This situation often results in significant taxes owing that cause taxpayers to resort to bankruptcy. For example, if a 2005 corporation tax return was arbitrarily assessed in 2007, that arbitrary assessment is now beyond three years and the balance cannot be replaced. So if the company really owed no money but CRA believed it owed $100,000- now it really does owe the $100,000. This is why as soon as you ever receive any arbitrarily assessed returns you should be contacting our office immediately to get filed and ensure your actual tax balance is the one that you paid.
Multiple Year Tax Returns
So you haven’t filed in a few years… okay more than few.. or never. Don’t worry about being judged. We have seen it all and we are here to help. We aren’t here to scare you in to thinking you are going to jail. When you come in to our office for an initial consultation we will spend the time figuring out what needs to be done and in what order. You will leave feeling like you have a better understanding of your situation and have a better idea of how we are going to get you out of it.
Filing multiple years of tax returns is different than doing them one at a time annually. We are acutely aware that CRA does not often process them in order and need to be mindful of how that impacts your carry-forward balances, or loss carry-backs. It can change decisions on when to deduct RRSP contributions, repay Home Buyer’s Plans, or which spouse needs to claim certain deductions.
When we are dealing with multiple year filings we frequently have a contact at CRA from either Non-Filing or Collections. So getting back on track is not just about filing your tax returns. It becomes about your relationship with CRA. That may mean we need to get extensions so that we have sufficient time for you to order pertinent documents or arrange financing. We are simultaneously working on your tax returns while holding off CRA from either preparing arbitrary assessments or moving forward with collection tactics.
We understand that if you have not filed in many years that you may not have perfect books and records, or no records at all. Unfortunately, you cannot avoid preparing tax returns forever because of a lack of documentation. Eventually you need to get help and get the tax returns filed the best that you can given your circumstances. You may even be eligible for the Voluntary Disclosure Program which can save thousands in penalties and interest. We will work with you to come up with an action plan to get the outstanding documentation. And when you are really stuck and don’t know what to do, we will help you figure out a way out of that too.
We also understand that while some people simply procrastinate, others were unable to file for multiple years due to medical conditions or other extenuating circumstances. The CRA does have a Taxpayer Relief program and we can discuss if the criteria for this process will work for you.
Once we complete your tax returns, it doesn’t end there. We can work with you to figure out the best way to deal with the CRA debt.