So you have filed your taxes on time and you have received your Notice of Assessment (Notice) from Canada Revenue Agency (CRA), now what?
Have a good look at it. You may learn some things about your taxes.
Most people just “file it away”. But before you do have a look at all the pages. Before you review the pages, the first thing you should do is staple it together in proper order. Easier to keep track of all the pages for the correct year and for the right person, especially if there is more than one of you in the home.
The first page is just the basic info: your name, address, part of your Social Insurance Number and whether you have a refund or you owe some taxes.
Is the amount what you expected? Were you expecting a higher refund? Or maybe it is higher than what you expected? Find out why. Do you owe more than what was expected? Or maybe you owe less? Find out why.
There may be some clues on page two and three. On page two will list your income and your deductions and total tax credits.
Look to see if there is a line near the bottom of the second page that says: Balance from previous assessments. This means you had an amount owing from last year’s taxes, or there were re-assessments during the year or you could have owed money to another CRA program, like GST credit or Canada Child Benefit (was Child Tax Credit and/or Universal Child Care Benefit).
Were you aware of previous amounts owing? If not, find out why.
Do you have access to your CRA via on line? If so you can go into your CRA account and look for all the assessments and re-assessments since 2006. You can also look at different programs like the GST credit and the Canada Child Benefit.
If you do not have on line access, review the paper assessments you have received in the past 12 months. If you have not received them, did you move in the past 12 months and perhaps you did not receive them?
Or come to our office and we will see what we can find out for you. With your signed authorization, we can access your CRA account on line and answer some of your questions.
Also look at the commentary that appears on your Notice, normally on page three. It may explain some differences (maybe you forgot to report a tax slip that you did not receive?). It will also comment on items that have been carried forward like Unused Tuition Credits, Manitoba Graduate’s Tuition Rebate, Unused Net Capital Losses or Unused Non-Capital Losses.
Do you claim the Disability Tax Credit? It should also comment about it. If you are under the age of 50 and you claim the Disability Tax Credit, you should consider contributing to the Registered Disability Savings Plan.
Another section of your Notice includes info about your RRSP (Registered Retirement Savings Plan). It will tell you what your contribution room is for 2017 and if you have any un-deducted RRSPs (make sure you understand why they have not been deducted).
One item that does not appear on the Notice is your Tax Free Savings Account (TFSA) room. You can go to CRA on-line to confirm your room, or contact our office and we can find out what CRA has for contribution room for you. You don’t want to go over, the penalties are severe.
So don’t just file away the Notice of Assessment. Understand what it is telling you. If you don’t understand something, contact us and we’ll help you figure it out. When you understand your taxes, it’s easier to do some tax planning if you can: using tax credits and deductions to your best advantage.
Remember, we love Rescuing Unclaimed Tax Credits! Just give us a chance!
If you haven’t file your taxes yet get them completed this month. If you owe, you will also have a penalty of 5% of the amount you owe (10% if it’s not the first time), plus 1% per month, so get them done by May 31.
If you are self-employed, you can relax a bit. You have until June 15 to file without penalty, although any amount you owe now has interest owing too (but at 5% per year, it’s not a bad interest rate). If you are a spouse of someone self-employed, your deadline is also June 15.
Need some help? Contact us!
Thank you to everyone who we had the honour of serving this year. More than $2,000 will be donated to the Ste Anne Hospital Fund and/or the Villa Youville. We donate $1 per tax return filed. Thank you for your trust in us!
Anni Markmann is a Personal Income Tax Professional and Certified Financial Planner; living, working, and volunteering in our community. Contact her at 204.422.6631 or 36 Dawson Road in Ste Anne (near Co-op) or Info@SteAnneTaxService.ca