This weeks theme for KBH Chartered Accountants is getting you all prepped and ready for tax-time! With tax season right around the corner, there’s just a few things you should know:
1. Not filing an income tax and/or benefit return because you had no income
Even if you have no income to report for the year you should still file a return. You never know as you may be eligible for a refund, or credits and benefits; such as the goods and services tax/harmonized sales tax credit, and the Canada child tax benefit.
2. Not reporting all your income
It is important to make sure you report all of your income from all of your slips. Slips are prepared by either your employer, payer, or administrator. You should receive most of your slips and receipts by the end of February. If you are unsure, or have lost or misplaced a slip for the current year, you can ask for a copy. If you are registered to My Account you can also access electronic copies of your slips. The electronic copies are an easier way to keep track!
If you file your return online, you can save time by using the CRAs Auto-fill my return service. This secure service will automatically fill in certain parts of your income tax and benefit return.
If you already filed your return but did not report income from a slip, you can change your return by using the “Change My Return” feature in My Account or by filling out Form T1-ADJ, T1 Adjustment Request, and sending it to your tax center.
If you fail to report an amount of income two times within four years, you may have to pay a federal and provincial/territorial penalty for repeated failure to report income.
If you want to correct earlier mistakes and put your tax affairs in order, you can make a voluntary disclosure through the CRAs Voluntary Disclosures Program. The program gives taxpayers a second chance to correct their taxes.
If this all seems too tedious, stressful, or complicated: contact us and we can handle everything, both large and small, for you!
3. Filing late
If you have a balance owing and do not file your return on time, the CRA will charge you a late-filing penalty. The penalty is 5% of your balance owing on the due date of your return, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months. Even if you cannot pay your balance owing by the filing deadline, you can avoid the late-filing penalty by filing on time.
4. Missing out on new tax credits, benefits, and deductions
New credits, benefits, and deductions could be introduced each year, some of which may apply to your tax situation. Before filing your return, go to the CRA website and learn about the new tax measures that will help save you money — or contact us, your friendly CPA, and we will be happy to find ways to save you money.
5. Not keeping receipts and records
It’s important that you keep any receipts and documents for at least six years after you file for a particular year. If the CRA chooses to review your return, you will need to submit your receipts to support your claims.
It’s important to not miss or omit any information on your tax returns. Contact a professional to learn more: info@kbh.ca