Chartered Professional Accountant located in Oakville

PERSONAL TAX FAQS

HOW LONG SHOULD I KEEP MY RECORDS?

You should keep your supporting documents for six years.

WHAT ARE THE PENALTIES AND INTEREST IF I DO NOT FILE ON TIME?

If you owe tax, the penalty is 5% of the outstanding balance plus 1% a month until the tax return is filed, to a maximum of 12 months. This works out to a maximum of 17%. If you have been late in filing your return in any of the last three previous years, the penalty can be more.

WHAT INFORMATION DO I NEED FOR SOMEONE ELSE TO PREPARE MY TAX RETURN?

You will need all your T slips. For example, you will need your T4, T3, T5, T5008, and RRSP deduction slips etc. Additional slips that you should have ready are tuition slips, child-care receipts, charitable donation, etc. If you use your home or vehicle for work and have a T2200 you compile your fuel receipts, insurance costs, maintenance costs, monthly lease costs, purchase invoice if you purchased a new vehicle in the year.

Remember to bring the last tax return that you have completed and your notice of assessment if you can find it.

HOW CAN I REDUCE MY CHANCES OF AN AUDIT?

The best defense against an audit is to file your tax return every year and on time. Why give the CRA a reason to examine your tax situation? Get it done!

If you file a GST/HST return, make sure the revenue on your business statement T2125 matches the revenue that is on the GST/HST return.