File your tax return by April 30. By Sree

Even on calm seas, a ship’s captain rarely relaxes. Instead, the chief focuses on potential dangers in nearby waters. Affluent individuals and aspiring wealthy people should take a similar approach to tax planning today. Both short and long term tax planning, particularly income tax planning, assists you in retaining relatively more money legally under your belt than to offer it to Government coffers. While it is better to consult your tax advisor about planning technique unique to your situation, here we provide some general information and techniques that are relevant in the context of the Canadian income tax system, from time to time.

The Canadian income tax system is a self-assessment regime. Taxpayers assess their tax liability by filing a return with the CRA by the required filing deadline. A taxpayer who disagrees with CRA’s assessment of a particular return may appeal the assessment. The appeal process starts when a taxpayer formally objects to the CRA assessment.

If there is a mistake or undue delay, the first step is to give the CRA the opportunity to resolve your complaint. For further details, you may refer CRA’s  pamphlet RC4420, Information on CRA – Service Complaints; if you are not satisfied with the outcome, you can approach The Taxpayers’ Ombudsman.

The Taxpayers’ Ombudsman can review service-related complaints only.  Examples:

  • *mistakes
    *undue delays
    *poor or misleading information or
    *staff behavior.
    At the end of their review, the Taxpayers’ Ombudsman will send you and the CRA the results of the review with recommendations, if any. As part of their recommendations to the CRA, they may suggest that the CRA:
    *give further reasons for a decision;
    *correct a misunderstanding, omission or oversight;
    *offer an apology;
    *change a policy or procedure;
    *make changes to systems or applications;
    *review its service standards; or
    *consider further staff training.

If you have been charged interest or penalties for late tax payments caused by reasons out of your control you can apply to have them waived under Revenue Canada’s “Fairness” doctrine.
If you wish to make changes to previously filed personal tax returns, individuals should not file an amended tax return. Canada Revenue Agency (CRA) prefers filing form T1-ADJ (Adjustment Request),  and the form is available at local tax services offices or on the CRA Web site.
April 30 is the deadline for individual taxpayers (except for those who are self-employed) to file their T1 personal Canadian income tax returns. The return should be filed even if there is an unpaid balance of taxes owing to avoid the late filing penalty. June 15 is the deadline to file Canadian personal income tax returns for individuals with self-employment income.
As already mentioned, even If you are unable to pay the balance owing, you should not defer filing. By this, you can avoid the late filing penalty but still will require paying interest on unpaid taxes.
For the same reasons, even if you’re missing slips or receipts ensure that you file your tax return by the filing deadline.
However, if you are grossly negligent in failing to report income on your Canadian income tax return, you can be assessed a penalty equal to 50% of the tax owing.
CRA may do a net worth assessment if you fail to keep proper books and records. It means CRA may look at the increase in your assets over time and assesses income tax on that increase.
When you reIf you have missed the deadline to file a Notice of Objection on your Notice of Assessment, you can apply for an extension of time. However, there are strict time limits for the application, and there must have been a valid reason to have missed the deadline.

Sree Kannuthurai is helping people to file their tax returns for the last 20 years. His phone: 647 268 2300

Actionable idea

  1. File your tax returns before the due date (April 30 for many people)
  2. If you are not satisfied with the assessment, you have options; but you have to exercise it within a strict time frame. Know and follow your choices.
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