Eight things to remember at tax time

As a Calgary accounting firm, many of our clients ask tax tips and questions to help them save money on taxes. The Canada Revenue Agency gets a lot of similar questions and they have answered them through various helpful articles which we are happy to share with you.

Getting ready to do your 2018 taxes? The Canada Revenue Agency (CRA) has a few tips that could save you time and money. At tax time, here are eight things to remember:

File your tax return

Most Canadian income tax and benefit returns for the 2018 tax year are due on April 30, 2019. It’s important to file your tax return on time to avoid interest and penalty charges, and possible delays or interruptions in your benefit and credit payments. Even if you didn’t receive any income this year, you may still get a tax refund and be eligible for benefit and credit payments.

For example, families who are eligible for the Canada child benefit (CCB) can receive up to $6,639 annually for each child under the age of 6 and up to $5,602 annually for each child aged 6 to 17. If you have a spouse or common-law partner, they also have to file their tax returns every year. The CRA uses the information from your income tax and benefit return to calculate your benefit and credit payments, and any related provincial or territorial payments for which you may be eligible.

If you want to do your taxes yourself, the CRA has a step-by-step guide that makes doing your taxes easy.

Make sure you claim tax credits and deductions

There are tax credits and deductions you may be able to claim on your return, like the working income tax benefit. Not sure what tax credits and deductions you may be eligible for? Go to canada.ca/taxes-get-ready to learn about the new and existing tax measures that could help you save money.

If you operate your own registered business, you may be entitled to claim a number of business expenses on your return, like motor vehicle or business use of home expenses. For more information on the expenses you may be eligible for, visit Business expenses.

Report all your income

Make sure you report all your income. You should have most of your slips, such as T4 slips, from your employer, the payer of your income, or administrator by the end of February. If you have not received, or you lost or misplaced a slip for 2018, ask the issuer of the slip for a copy. If you register with My Account, you may have access to online copies of your slips. If you are still missing information, use your pay stubs or statements to estimate your income to report. Keep all of your documents in case the CRA asks to see them later.

Some income you earn may not be included as part of a tax slip. Tips, money earned providing accommodations or ride sharing, regularly selling stuff at a flea market or online, providing tutoring services, handy-man or snow removal services – all of this is considered income that must be reported.

Did you sell your principal residence in 2018? If so, you have to report basic information on your return to claim the principal residence exemption.

If you already filed your tax return but did not report all of your income or deductions, use the ReFILE service in your NETFILE software to change your return, visit an EFILE service provider to Refile, or use the “Change my Return” service in My Account. You can also change your return with Form T1-ADJ, T1 Adjustment Request, and mail it to your tax centre. For more information, please visit How to Change Your Return.

Make valid claims

Make sure you know what you can and cannot claim. Sometimes non-deductible amounts, such as funeral expenses, wedding expenses, loans to family members, a loss on the sale of a home used primarily as a residence, and other similar amounts, are claimed by mistake.

If the CRA finds that you made a mistake or made a claim in error, they will change your return. For a list of the most frequent changes the CRA makes, see common adjustments.

Take advantage of free tax software

Did you know there are free certified software programs that you can use to do your taxes online? Last year, about 90% of Canadians filed their returns online. Some of these software programs will give you suggestions on which tax credits and deductions you can claim and which benefits and credits you can apply for, based on the information you enter.

If you are fully registered for My Account, you can use Auto-fill my Return to automatically fill in parts of your current and prior-year income tax and benefit returns, making filing even simpler. You will also be able to use the Express NOA service to get your notice of assessment right after you file your return.

Get free tax help

If you have a modest income and a simple tax situation, a volunteer from the Community Volunteer Income Tax Program (CVITP) may be able to do your taxes for you, for free. Find a tax preparation clinic near you or learn more at canada.ca/taxes-help. You can also find a tax preparation clinic using the MyCRA mobile web app.

File and pay on time

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.

If you cannot pay the amount you owe by the due date, it’s best to contact the CRA before then. The CRA will work with you to resolve your tax debt. You may be eligible for a payment arrangement or taxpayer relief.

If you receive benefit payments, like the Canada child benefit, and you did not file your tax return on time, your payments can be delayed or stopped.

If you have never filed a return or haven’t filed for a few years, the CRA can help. You may be eligible for relief of interest, penalties, and prosecution by applying to the Voluntary Disclosures Program.

Keep receipts and records

Keep your receipts and other supporting documents for at least six years from the end of the tax year to which the records relate.

Sometimes returns are reviewed to make sure that income, deductions and credits are correctly reported. If the CRA reviews your return, having your receipts and records on hand makes it easier for you to support your claims. For more information, see responding to the CRA.

There are many Calgary accountants in our beautiful city providing tax services. However, we hope you will want to work with a CPA who specializes in small business accounting and consultation. Whether you are for profit business or a not for profit business looking for a CPA, we can help. Contact us today or call us at 587-717-7786.

Download this Tips From CRA Article PDF!

Top questions we get at tax time

As a Calgary accounting firm, many of our clients ask tax tips and questions to help them save money on taxes. The Canada Revenue Agency gets a lot of similar questions and they have answered them through various helpful articles which we are happy to share with you.

Every year around tax time, Canadians call the Canada Revenue Agency (CRA) with a variety of questions. See below for our answers to the top questions asked at tax time. A number of these can be addressed by using the CRA’s online services such as My Account or the CRA’s mobile web apps, MyCRA or MyBenefits CRA.

Top questions

How do I change my address?

You can do it online if you are registered for My Account, MyCRA or MyBenefits CRA, or by calling us at 1-800-959-8281. You can also mail or fax a completed Form RC325, Address Change Request, or a signed letter to your tax centre. Your signed letter must include your social insurance number, your new address, and your moving date.

How do I change my marital status?

You can change your marital status online by using the option “Change my marital status” through My Account, MyCRA or MyBenefits CRA, by calling us at 1-800-387-1193 or by sending a completed RC65 Marital Status Change to your tax centre.

What is my balance owing or where is my refund?

You can find the amount of your balance owing online by logging into My Account or the MyCRA mobile app. If you have a refund, you can find the refund details online in My Account or using the MyCRA mobile app, which includes the refund method (direct deposit or mailed cheque), the date it was sent and the amount. You can also call the Tax Information Phone Service (TIPS) at 1-800-267-6999 to ask about your refund. TIPS is available from mid-February to December 2019.

How can I get a copy of my notice of assessment or reassessment?

You can get a copy quickly and easily through My Account. If you are registered for My Account you will be able to view and print detailed information on an assessment or reassessment of your income tax and benefit return for the current year and the previous nine years.

You can choose to receive your tax correspondence online through My Account or the MyCRA and MyBenefits CRA mobile apps. To register, select “email notifications” or enter your email address on your tax return. When you register for the email notifications service, you will receive an email when your notice of assessment or reassessment, and other CRA correspondence, is available to view online. Go to email notifications to find out more.

How do I sign up for direct deposit?

You can sign up for direct deposit online through My Account; by using the MyCRA and MyBenefits CRA mobile apps; through your financial institution (Desjardins members and TD Canada Trust customers); by filling out and sending a Canada Direct Deposit Enrolment Form; or by calling 1-800-959-8281.

The CRA’s online services make filing and managing your taxes easier

The CRA’s online services are fast, easy, and secure. You can use them to help file your income tax and benefit return, make a payment, track the status of your return, register for online mail, apply for child benefits, and more. Access the CRA’s full suite of self-service options—register for the CRA’s online services today, and start managing your tax matters online!

If you need to register for My Account or the CRA’s mobile web apps, MyCRA or MyBenefits CRA, select “CRA register.” You will need to provide:

  • your social insurance number;
  • your date of birth;
  • your current postal code or ZIP code; and
  • an amount you entered on your income tax and benefit return, so have your copy on hand (the amount requested changes and it could be from either the current tax year or the previous one).

As qualified and designated Chartered Accountants in Calgary, Versatile Accounting has helped many businesses with sound business consultation, corporate taxes, review engagements, audit risks and corporate accounting services. We want to educate and guide you against risks, and our friendly yet professional approach is to save you money. Book an appointment today or call 587-717-7786.

Download this Tips From CRA Article PDF!

Seniors Put money back in your pocket this tax season

Seniors: Put money back in your pocket this tax season!

As a Calgary accounting firm, many of our clients ask tax tips and questions to help them save money on taxes. The Canada Revenue Agency gets a lot of similar questions and they have answered them through various helpful articles which we are happy to share with you.

As a senior, you may be eligible for a wide range of tax benefits and credits. The Canada Revenue Agency (CRA) has tips to help make sure you get everything you’re entitled to this tax season.

Take advantage of free tax help

If you have a modest income and a simple tax situation, community volunteers may be able to do your taxes for you, for free. Free tax clinics are usually open from February to the end of April, with some open year-round. Find a free tax clinic near you.

Protect yourself from tax scams

Did you get a suspicious email, telephone call, letter or text message claiming to be from the CRA? If you’re being asked for personal information such as your credit card number, bank account number or passport number, this is a scam. Learn how to protect yourself.

Claim benefits, credits and other expenses

As a senior, here are some of the most common things that you may be able to claim:

  • Pension income splitting – As a pensioner, you may be eligible to split up to 50% of your eligible pension income with your spouse or common-law partner to reduce the amount of income tax you may have to pay, if your spouse or common-law partner is in a lower tax bracket.
  • Registered retirement savings plan deduction – Deductible contributions to your plan can reduce your tax owing. You can contribute to an RRSP up until the end of the year you turn 71. You can also contribute to your spouse’s or common-law partner’s RRSP until the end of the year they turn 71.
  • Medical expenses – You may be able to claim eligible medical expenses you or your spouse or common-law partner paid in any 12-month period ending in 2018.
  • Age amount – If you were 65 years of age or older on December 31, 2018, and your net income was less than $85,863, you may be able to claim up to $7,333 on your return.
  • Disability tax credit – If you have a severe and prolonged impairment in physical or mental functions, you may be eligible for the disability tax credit (DTC). If your spouse or common-law partner or your dependant have a severe and prolonged impairment in physical or mental functions, are able to claim the DTC, and they don’t need to claim all or part of the amount, they may be able to transfer the amount to you.
  • Canada caregiver credit – Do you support a spouse or common-law partner, or a dependant with an impairment in physical or mental functions? The Canada caregiver credit (CCC) is a non-refundable tax credit that may be available to you.
  • Pension income amount – You may be able to claim up to $2,000 if you reported eligible pension, superannuation, or annuity payments on your return.
  • Guaranteed income supplement – The Guaranteed income supplement (GIS) provides a monthly non-taxable benefit to Old Age Security (OAS) pension recipients who have a low income and are living in Canada. If you live on a low-income and receive the GIS or allowance benefits under the OAS Program, you must file your return by April 30 to make sure your benefits are renewed.
  • Goods and services tax / harmonized sales tax (GST/HST) credit – You may be eligible for tax-free quarterly payments that help individuals and families with low and modest income to offset all or part of the GST or HST that they pay. When you file your taxes, the CRA automatically determines your eligibility.
  • Registered disability savings plan – This type of plan helps families and others save for the long-term financial security of a person who is eligible for the disability tax credit.
  • Working Income Tax Benefit – The working income tax benefit is a refundable tax credit that provides relief for eligible working low-income individuals and families who are already in the workforce.
  • Climate Action Incentive payment – If you are a resident of Saskatchewan, Manitoba, Ontario or New Brunswick, you may be eligible for the proposed Climate Action Incentive payment when you file your income tax and benefit return for 2018. A 10% supplement is available to residents of small and rural communities. The incentive will first reduce any balance owing for the year, then may create or increase any refund to which you may be entitled.

For more tax information for seniors, go to Changes to your taxes when you retire or turn 65 years old

There are many Calgary accountants in our beautiful city providing tax services. However, we hope you will want to work with a CPA who specializes in small business accounting and consultation. Whether you are for profit business or a not for profit business looking for a CPA, we can help. Contact us today or call us at 587-717-7786.

Download this Tips From CRA Article PDF!