| F.A.Q.'s |
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| 1. I haven't filed a tax return for
several years? |
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| You only need to file a tax return a tax return
if you owe tax or are asked by CCRA to file a return. If you
have not been a Canadian resident, have taxes deducted at source,
have been living on savings or have been supported by others,
you may not need to file a return. If you don't fall within
one of these categories you may have to file back tax returns.
Although there are penalties for late filing and interest charges
to consider, filing old returns is commonplace to us. It happens
far more often then you might think. |
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| 2. I have no accounting records to
prepare my tax return? |
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| We often run into cases where our clients have
few or no records. Our job is to prepare the best tax return
possible for you given the lack of records. If the records are
lost there is no point spending any more time looking for them.
We will design a different approach for you based on your individual
situation. From copies of bank statements we may be able to
determine income and expenses or CCRA may have copies of your
T-4 and T-5 slips. We haven't found a case where we couldn't
file a tax return that would not stand up to CCRA scrutiny. |
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| 3. I am going to start a new business.
When do I need an accountant? |
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| You should see an accountant as soon as you have
the business formulated in your mind. There are different ways
of starting a business and some may be more advantageous to
you than others. If you think you would like to begin a long-term
relation with us, we will be happy to offer you one-hour of
free consultation services to help you with your new business. |
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| 4. I have started a new business.
When do I need to file my first income tax return? |
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| If your business is conducted via a partnership
or proprietorship, you must have a December 31 year-end. That
means you must close your books the first December 31st after
your business started. You must include the profit or loss on
your personal income tax return, which is due the following
June 15th. If you have started you business via a limited company,
you may choose any year-end, up to 53 weeks after you started
the business. From that date, you have six months to file your
corporate income tax return. |
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| 5. CCRA wants to audit me. What should
I do? |
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| Contact us immediately. CCRA has a right to review
your books and records but you have the right to have someone
represent you. Most of the audit can be conducted in our office
and you don't have to be present to deal with the auditor on
a day-to-day basis. We are very familiar with what CCRA auditors
want and by being the intermediary can make this stressful situation
as painless as possible. You should not talk to the auditor
on your own. Depending on how you phrase things may be difference
in an expense being deductible or not, or a gain being a capital
gain (taxed at 50%) or straight income gain (taxed at 100%). |
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| 6. What are the death taxes in Canada? |
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| There are no death taxes as such in Canada. However,
when a person dies that person is deemed to have sold all assets
at the time of death. On real estate and stocks this likely
gives rise to a capital gain problem. 50% of the gain is added
to the deceased's income and taxed at their regular rate. Also,
RRSP's or RIFF's are collapsed upon death and the total amount
is taxed at the time of death. One exception to both of these
rules is that anything left to a spouse can be "rolled-over"
to a spouse so that they assume the deceased's position and
no tax is due. |
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| 7. How much can I give before gift
taxes come into play? |
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| There are no gift taxes in Canada. There is no
limit to the amount that can be given away. However, if funds
are given to a child or spouse, the income from the funds will
be taxed in your hands. Also if you give property away you may
trigger a capital gain. |
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F.A.Q.'s
