8 Tried and True Tax tips

Wednesday, 01 April 2015 05:26 Written by  Published in Money Read 1191 times
Here are tried and true tax tips, irrespective of the tax year, that will ensure you maximize your refund, minimize your tax bill, or the best option where you neither owe nor get a refund.

1. Use a tax checklist as the basis for gathering your documents to prepare your tax return. This way,you will reduce the possibility of leaving money on the table for CRA. Please check our website "domytaxestoday.com", and at the very top you will see a link for our personal tax checklist. You can also get onto our mailing list, because each year we routinely send out our updated tax checklist.

2. If you believe that you are missing a T4 or TS slip, please let your tax preparer know this, so they may check with CRA for the missing slip, or you can provide them with an estimate to include on your tax return. Believe it or not the penalties for missing a T4 can be as high as twice the amount of the unpaid taxes.

3. Please investigate, and if possible, limit your involvement in donation gifting plans. You know, those that you get a donation receipt which is far in excess of what you actually donated. If you have already donated this year, it is advisable NOT to include these receipts in your tax return. Treat it as a loss that saved you from an even bigger loss. CRA has indicated that to date they have not found one gifting tax shelter that is in compliance with the Income Tax act. Because of the number of clients we see involved in this, we will be doing a separate video/article on this topic.

4. If you do not own or operate a business, please do not include business losses on your tax return. No matter how huge a refund this provides, if you are selected for a review by CRA, and you are unable to provide supporting documents, CRA may deem that you provided a false or misleading tax return, and you may be assessed for gross negligence penalties.

5. If you are claiming employment expenses (like motor vehicle expenses, home office expenses, cell phone etc) this is especially relevant to personal support workers, some travelling nurses, and commissioned employees, you must have a T2200 signed by your employer, which clearly indicates which employment expenses you incur, and you have not been reimbursed for. Otherwise, if you are selected for a CRA review and you are unable to provide supporting documents, they will disallow your previous claims, and charge interest (and perhaps penalty).

6. Common trigger areas for CRA review of individuals are- business losses, business investment losses, rental losses, donations, medical claims, moving expenses and employment expenses. If you have any of these included in your tax return, please ensure that you get a tax professional to review your return prior to submission to CRA.

7. If you do not prepare your tax returns yourself, please ensure that you do your homework when selecting a tax preparer. It is always best to use a Chartered Professional Accountant, they are regulated by the Chartered Professional Accountants of Ontario, and you have potential recourse where there are tax preparer errors. Remember, the cheapest alternative, can sometimes turn out to be the most expensive in the long run.

8. Check your tax return before submitting to CRA. Do not leave it to a third party to prepare your returns. It is you who CRA holds primarily accountable for your tax return. If your tax professional does not want to review your tax return with you, my advice is to find another professional who will. This is too serious an issue to leave to chance.

Last modified on Wednesday, 01 April 2015 05:39
Celia Meikle

Celia Meikle is a Chartered Professional Accountant, licensed to practice public accounting by the Institute of Chartered Professional Accountants of Ontario. Currently, she is a Partner in the firm Green Meikle & Smith Chartered Accountants. Celia is the proud mother of Daniel and Jonathan, and a member of Kingdom Life Ministries Church in Mississauga.

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Website: www.greenmeiklesmith.com/
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