News Article 5
Technically, everyone can be audited. However, the CRA tends to zero in on certain categories of taxpayers. Some elements of your tax return could also raise red flags and lead to an audit. You’re especially at risk if:
- You’re self-employed. Tax returns for self-employed people are usually more complicated. There isn’t a single piece of paper, like a T-4 slip, that the CRA can use to cross-reference the income you declared.
- You work in construction, retail or the restaurant industry. The CRA has singled out those industries, where businesses are often heavily cash-based, for extra scrutiny due to high rates of tax evasion.
- You keep reporting rental and/or business losses. Are you really bleeding cash or are you stashing it away in the Cayman Islands? The CRA will wonder.
- You reported drastic swings in income, especially if self-employed.
- Your income doesn’t match your postal code. Are you making significantly less than your neighbours? The CRA could start to wonder how you can afford to live where you do.
- You have offshore assets. Owning assets abroad is also something that could attract unwanted scrutiny.
- You received wire transfers from abroad of $10,000 or more. Since 2015, all financial institutions must report to the CRA, international electronic funds transfers (EFTs) of $10,000 or more. If your bank accounts have been on the receiving end of several of those, the CRA might have some questions.
However, tax reviews are not audits!
The first step when you get a letter from the CRA saying it wants to take examine your taxes, does not mean you are being audited, what you need to do is to really understand the letter that's in front of you.
If you are not sure give us a call.
News Article 4
For several years, the Canada Revenue Agency (CRA) has been seeking to convince Canadian taxpayers of the benefits of filing their annual tax return online, and it seems that their efforts have been successful. Last year, over 80% of Canadian taxpayers filed their returns by electronic means. The change has been a rapid one, as nearly 40% of tax filers filed a paper return in 2011, with that number dropping to less than 20% in 2015.
News Article 3
The 2016-17 Ontario budget included an announcement of a major restructuring of the province’s financial assistance programs for students pursuing post-secondary education.
As part of that restructuring, the government will create a single major upfront grant — the Ontario Student Grant (OSG), starting in the 2017-18 school year. In order to finance the OSG, several current grant programs administered by the Ontario Student Assistance Plan, including the Ontario Tuition Grant, the Ontario Student Opportunity Grant, and Ontario Access Grants will no longer be funded.
The budget papers indicate that the new OSG program will mean that students from families with incomes under $50,000 will have no provincial student debt, and more than 50% of students from families with incomes of $83,000 or less will receive non-repayable grants that will exceed average college or university tuition.
More information on the changes to OSAP can be found on the Ontario Finance website at www.fin.gov.on.ca/en/budget/ontariobudgets/2016/bk1.html.
News Article 2
There’s no denying that the Canadian tax system is complex, even for individuals with relatively straightforward tax and financial circumstances. As well, significant costs can follow if a taxpayer gets it wrong when filing the annual tax return. Sometimes those costs are measured in the amount of time needed to straighten out the consequences of mistakes made on the annual return; in a worst case scenario, they can involve financial costs in the form of interest charges or even penalties levied for a failure to remit taxes payable on time or in the right amount. Whatever the reason, fewer and fewer individuals are willing to brave the annual trip through the 488 lines of the federal tax return (plus seemingly innumerable related federal schedules and provincial tax forms), and that means that the percentage of Canadians who have their return prepared by someone who has, presumably, more expertise, has continued to rise.
News Article 1
Any taxpayer told of a strategy that offered the possibility of saving hundreds or thousands of dollars in tax and increasing his or her eligibility for government benefits while requiring no advance planning, no expenditure of funds, and almost no expenditure of time could be forgiven for thinking that what was proposed was an illegal tax scam. In fact, that description applies to pension income splitting which is a government-sanctioned strategy to allow married taxpayers over the age of 65 (or, in some cases, age 60) to minimize their combined tax bill by dividing their private pension income in a way which creates the best possible tax result