Tax Tip Thursday

Tax season is around the corner, and that means you are soon going to be sending and/or receiving a bunch of different types of slips. These are important to both employers and employees, so I thought I would talk about them!

For Employers

If you have employees or commissioned sales reps, you need to file your T4 and T4A returns by the end of this month. They have to actually be filed with the CRA no later than February 28! There are penalties and interest for filing this late, and you’ve already given the government soooooo much money that I am sure you don’t want to give them any more!

If you are in the construction industry and you have sub contractors, you need to file T5018 forms within six months of your reporting period (could be your year end or the calendar year end). I suggest you just get them done now and out of the way! We can help you with that.

Some things to remember:

• If you do not file your T5018 reports on time, you could be subject to penalties and interest from the CRA
• Penalties can be as much as $1000 for 50 employees or fewer
• Make sure you have your contractors’ names, addresses, phone numbers, and BN/HST numbers or SINs as you will be asked for that information on the filing report!

For Employees

You are entitled to receive your T4, T4A, TR(OAS), TRA(P), TR4SP, T4RIF, T5, and a whole host of other forms on or about February 28 as well (or at least within the week). If you have several sources of income or employers, make a point of knowing what you should be receiving and how much should be on each one! You might want to gather up your pay stubs and make a list for yourself. Employers and payroll companies are NOT immune to mistakes! A lot of these things are done by people, and they can mess things up. They are also OFTEN late sending out their various tax slips, and some don’t do it at all! I have come across this many times.

A common mistake when this happens is that people think they don’t have to claim income just because there was no T4. This is incorrect! It’s possible that the CRA doesn’t know about the income, but it’s unlikely. The outcome of not claiming the taxes now is the potentially nasty surprise of a tax bill with penalties and interest at a later date! I have also seen this happen, and it is never fun. Personally, I would not sleep well with this risk on my mind.

In an effort to make sure you do get your slips, some things to consider:

• If you have an online payroll account with your employer/payroll provider, you should have access to your tax slips on February 28
• If they are coming by snail mail, they should arrive no later than the first week of March
• If you have moved or changed residences (or even changed email addresses) through 2021, you might want to contact your employer/payroll department to make sure they have all the correct info
• If you changed jobs through the year or left your employer during 2021, you might want to contact them to confirm that they are sending your tax slips over! Sometimes ex-employees can be overlooked.

Unfortunately, RRSP slips are not due to be filed until May 1. many are filed earlier, but there is no obligation. So, if you made RRSP contributions, you will want to know the total amounts for your tax return preparation. Some things to consider for those:

• Make sure you have the slips from all your contributions throughout the year. You should have received a receipt for each one.
• If you made contributions through work or have an RPP at work, the amounts are probably on your last pay stub.
• Same as above with the address changes. Follow up up now to make sure everything is in order!
• If you had a Registered Pension Plan (RPP) with your employer, you will want to make sure your pension administrator has your new contact info as well.

Tax Season Is Busy!

Make sure you’re staying on top of everything! It is not so complicated if all your income came from one employer and you aren’t contributing to an RRSP, but some people can end up with a whole pile of forms to sort through. It can be daunting! Fortunately, we are here to help. We know our way around these things, and we know how to keep more of YOUR money in YOUR pocket. Make an appointment today to get ahead on this tax season!

Next week — RRSPs.

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.