|
Failure to File
Never fail to file your income tax return when you know or suspect that
you have taxes payable.
Filing Dates for Sole
Proprietors
If you or your spouse is self-employed your tax filing date is June 15th
of the following year. However, you need to pay your tax bill by April
30th to avoid penalties.
Owner's Salary
Consider paying sufficient salary to maximize your CPP
contribution and RRSP contribution limit, then pay dividends. As a sole
proprietor you cannot take a salary.
Director's Fees
You may see a Director's Fee from related companies,
such fees are part of your employment income and may raise your RRSP
limit.
Gifts to Employees
Gifts in cash or by means of a credit to loan or
advance accounts are taxable. Gifts to each individual up to a total
value of $500 in merchandise are not taxable.
Vehicle Mileage
If you fail to keep a log book CRA could assess you
equal to the full standby amount and a significant share of the
vehicle's operating expenses.
Gifts
Gifts of capital from a parent to an adult child do not create
taxable events.
Interest Income
Many taxpayers include stock and mutual fund dividends or annuity
disbursements in their gross income but they forget to include interest
earned in savings accounts or interest-bearing chequing accounts.
EFile/NetFile
Filing electronically does not increase your odds of an after-assessment
review. The CRA uses the same selection process for paper and electronic
returns.
Appeals
You do not have to agree with the CRA. You can appeal your Notice of
Reassessment if you disagree with the decision. However a Notice of
Objection must be filed within a certain period of time.
Tax Return Errors
If you are in error, the CRA will charge interest on the additional
amount from the deadline date of the tax year.
Tax Audits
Normally, CRA can only go back three years to reassess a prior-year
return. However, if an error or omission was made out of neglect,
carelessness or willful default the CRA can go back as far as it wishes.
|
