Tax Tip Thursday

Well, we survived tax season! You know what’s next… Audit Season.

Now that tax season is finally over, Part Two begins as the government starts asking questions

Open and READ your mail!!

ESPECIALLY if it’s from the CRA. However, don’t just immediately spring into action by doing exactly what the mail says to do.

I have heard horror stories around investments, life insurance, car insurance, cars, etc. where people aren’t opening their mail and it’s causing them tons of grief! So please. Open your mail. ALL of it! We discussed burying our heads in the sand last week and this is just a continuation.

There’s always a focus.

For the last few years the CRA has been focusing on home office and automobile expenses. I don’t think that is going away, but I am seeing a lot of pre-assessment reviews for sole proprietors and partnership returns, specifically for the HST rebate.

We have also been seeing a lot of reviews on disability tax credits and support payments, so make sure you have your documentation lined up and ready to go!

You’ve got mail — Now What?

Please open it! There’s a few things it could be, but you always want to open it as soon as you receive it.

If it is a request for information, you have 30 days to respond in almost all cases. BUT, the vast majority of the documents sent by the CRA are assessments, notices indicating filing dates, changes to your account, access codes, changes to filing dates (in the case of the last year), reminders to pay installments, acknowledgments of payments, and of course Reviews and Audits.

While the Audit is a very well-known and understood word, they are rare. Reviews are much more common and that’s what most people get, if they get anything. They are usually not very intrusive and are primarily requests for additional information supporting what was filed on your income tax return.

For the latest onslaught of reviews, there are a few schedules that need to be provided and that is about it. Most of the information is available in your tax return.

If you don’t respond within the 30 days, the CRA will disallow the deductions or rebates in question and you will be out of pocket hundreds or thousands of dollars that you are (probably) legitimately entitled to!

I’m getting reviewed…

Don’t worry. As I said, reviews are usually not very intrusive and the CRA just wants more information. Call now or book an appointment today and I will be happy to look at the letter you received and help you put everything together that the CRA is asking for. No sweat!

Disclaimer:

This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal or tax advice nor can it or should it be relied upon. All tax situations are specific to each individual. If you have specific tax questions you should book an appointment for a 1 on 1 consultation.