Eleventh Hour Tax Tips: Newsletter April 29, 2022

Hello All,

According to Revenue Canada, approximately 18 million tax returns have been filed as of April 25th. This is great, but it also means that approximately 12 million Canadians have not yet filed their tax returns, when compared with total returns received for 2021. It is perhaps not a huge surprise that many of us leave the tedious task of tax filing to the very last minute (including myself :)). Of course, if you haven’t filed, now is the time to get it done! Below are my annual tips for tardy tax filers:

• I encourage everyone, who is doing it themselves, to use tax software. This significantly contributes to accuracy and can help you save taxes by optimizing certain deductions and credits.

• If you don’t think you will be able to get your taxes in on time, and you owe tax, you should at least make an estimated payment. This will help you reduce penalties and interest (which are based on how much you owe in taxes).

• Even if your taxes are simple and you expect a refund, you should file your taxes as soon as possible a) to get that refund! and b) ensure that you get any additional credits (GST, Solidarity tax, child tax benefits etc.) that you are entitled to, on time.

• The deadline for filing your taxes is May 2nd this year so you still have some time. Weekends are always a good time to hunker down and get it done.

• If you are reporting small business/self employed income, then both you and your spouse have until June 15th to file your return. Note that both CRA and Revenue Quebec start charging interest after May 2nd on any taxes payable. However, penalties, which tend to be much steeper will only be charged after June 15th.

• If you are missing tax slips, you can often get them by going to CRA my account and downloading them there. You can also use the “auto fill” feature offered by most software to automatically download your tax data.

• Don’t forget to file your GST/HST and QST return. Penalties for late filing and payment are significant.

• Taxes can be paid by using bill payments that are available in most online banking portals. Your reference number is your SIN.

And of course, for all of us that leave it to the last minute, resolve to do it on a more timely basis next year!

I have included a blog post from last year that gives some insight into notices of assessment and the dreaded request for information/audit. Most of us will receive a simple NOA which details the line items from our tax returns and indicates an amount payable or refund. A few unlucky taxpayers, who usually have something on their tax return that triggers a red flag (high deductions, credits or expenses or something else that is unusual), will receive a request for information or an audit letter, which can even happen a couple of years after you have filed your tax return. The most important thing that you can do is to ensure that you address it as soon as possible.

Small Business Articles/Tips

The Twitter Takeover: Undoubtedly most of you have heard about Elon Musk’s acquisition of Twitter. There are a proliferation of opinions out there from “its very bad” to “its very good”, which can be found on every social media platform and news site. Musk’s stated goal with this takeover is to provide a forum where free speech is allowed to thrive. There are, however, numerous challenges that he will need to overcome. I, for one, will be watching closely to see how he manages these challenges and to see how Twitter evolves. This article simply provides a factual timeline of the takeover.

Tax Tips: CRA Contacting You for More Info? This article from the Financial Post gives you some insights on what you should do when CRA asks for more information. Foremost, make sure that it is in fact CRA that is contacting you.

QBO Tip : Once you have completed your small business tax return, using information from the profit and loss from QBO, you should close the period and save the profit and loss/balance sheet statements as a PDF file in your accounting folder, for the period ending December 31, 2021. I also recommend exporting your profit and loss/balance sheet detail to excel or google sheets. This will help you in case of audit or requests for more information from CRA/RQ, or if you simply want to see the details for each account. It is also very useful if changes are made after you have filed your return and you need to identify what they relate to.

Books and Resources

Now that tax season is coming to an end, and after taking a couple of weeks to recharge, I will start working on a new book as well as creating more resources. If you have any suggestions, don’t hesitate to reply to this email.

Small Business Tax Facts(Sole Proprietorships/Registered Businesses/Self Employed Workers)

This book helps you have a better understanding of tax (brackets, tax rates, deductions etc), how it applies to your unincorporated small businesses and how to do your own tax return (or at least understand what your accountant does). It also includes a comprehensive breakdown of deductible expenses, by category with special sections on more complex deductions such as home office, vehicle and capital cost allowance.

FastStart Your Corporation(Corporations)
A step by step guide to starting your small business corporation, including what you need to know about incorporation, setting up your accounting and tax considerations.

QuickStart your QuickBooks(Sole Proprietorships and Corporations)
A comprehensive guide that takes you through the many features of QBO and gives you step by step instructions on how to setup and work with QBO day to day. It is ideal for beginners who have never used QBO before and also for those who are currently using it, but have questions or need guidance.

FastStart Your Business (Sole Proprietorships)
A step by step guide for anyone who is planning to start a Canadian business or become self employed (and does not want to incorporate) and wants to know what they need to do or simply has questions.

Small Business and Your Dividends (Corporations)
For incorporated small business owners who want to know more about small business dividends, the differences between salary vs dividends and which is better and step by step instructions on how to file your own dividend declarations (T5s).

Use discount code “special” to save 20% on any (or all) book(s) when you purchase from the website.

Please note that all books on my website are in PDF format.

If you prefer a print version, all books are also available at Amazon . Note that print versions purchased on Amazon include a complimentary PDF - you just need to email me and include proof of purchase.

Free Resources

Business 2022 Tax Deadline Calendar
Starting A Corporation Checklist
Start Your Business Checklist
Dividend Declarations Checklist
Small Business Tax Return Checklist
QBO Set Up Checklist.
Small Business Calculators
Previous newsletters.

Consultations

I also provide consultation services where I can answer your specific questions relating to your small business and/or finances, provide clarity and give you guidance. Additional details can be found here and here.

Note that I no longer provide ongoing accounting or tax preparation services.

Reviews/Feedback

• I would love to hear your comments on my current blog posts, topic ideas for new blogs, book feedback or anything else that you want to talk to me about. You can use my feedback form or email me directly at ronika@montrealfinancial.ca.

• For anyone who has purchased my books through Amazon or directly and found them useful, I would be very grateful for a review on Amazon (to leave a review you only need to have an account with Amazon even if you did not purchase the book from there).

• Finally, if you think anyone would benefit from this newsletter, you can send them to my subscribe link.

Hope everyone has a lovely weekend (as we put taxes behind us and begin to look forward to summer)!

Ronika