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CRA Arbitrary Tax Assessment

Arbitrary Tax Assessment

Arbitrary Tax Assessment

CRA Arbitrary Tax Assessment

What happens when you don’t file income tax returns, HST returns, or corporate tax return? The CRA files your taxes for you. That’s right, they calculate your income based on past years income and assess you an arbitrary tax amount. The arbitrary assessment amount usually does not take into account any of the tax credits or breaks that could apply. The CRA will apply interest and penalties on the arbitrary amounts and send out a notice of assessment.

The process usually starts with few letters and followed by phone calls. If the CRA does not receive an answer, the next step is the arbitrary assessment. This is usually when clients call and need our assistance. We have the expertise to file your back taxes and get the arbitrary amounts corrected through appeals and amendments. We prepare and file the returns with great detail to avoid unwanted audits and future re-assessments.

The best way to avoid this hassle is to file your back taxes even if you are not able to pay off the taxes owing. We have the expertise to negotiate with the Canada Revenue Agency to setup a payment plan until the amounts are paid off.

Contact our tax accounting firm located in Brampton and Mississauga for all your back tax needs. 

Interest and penalties

Interest

If you have a balance owing for 2014, the CRA will charge compound daily interest starting May 1, 2015, on any unpaid amounts owing for 2014. This includes any balance owing if we reassess your return. In addition, the CRA will charge you interest on the penalties starting the day after your return is due. The rate of interest we charge can change every three months. See Prescribed interest rates.

Late-filing penalty

If you owe tax for 2014 and do not file your return for 2014 on time, the CRA will charge you a late-filing penalty. The penalty is 5% of your 2014 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.

If the CRA charged a late-filing penalty on your return for 2011, 2012, or 2013 your late-filing penalty for 2014 may be 10% of your 2014 balance owing, plus 2% of your 2014 balance owing for each full month your return is late, to a maximum of 20 months.

 

Foreign Income Reporting T1135: Tax Accountant

Foreign Income Reporting T1135: Tax Accountant

T1135 Foreign Income Reporting

T1135 Foreign Income Reporting

 

Canadians that have accumulated wealth in other parts of the world need to be aware of the Canadian reporting requirements. If you are a Canadian resident you are required to report foreign assets which have a cost value of over $100,000. On a personal income tax return you must answer “Did you own or hold foreign property at any time in the year with a total cost of more than $100,000 Canadian?” If the answer is yes to this question, then you would be required to file the T1135. Over the past few years the foreign reporting requirements have changed which are outlined on the newly redesigned T1135 (Foreign income Verification Statement) tax forms.

Where to disclose my foreign assets?

Canadian resident taxpayers are required to file T1135, with their T1 personal income tax return if at any time in the year the total foreign property they hold was more than $100,000 (Canadian). The CRA will impose hefty penalties if this form is not filed. For 2014, taxpayers can file form T1135 electronically, but corporations must still file a paper version of the form.

Examples of foreign property that needs to be disclosed?

Cash, stocks, bonds, land and buildings which are located outside Canada. Other foreign property that would be disclosed on the T1135:

  • Funds held in foreign bank accounts
  • Shares of foreign corporations, foreign mutual funds
  • Foreign investments
  • Interest in foreign insurance policy

For the full list refer to the T1135 form.

Examples of foreign property that does not needs to be disclosed?

You are not required to report personal properties such as art, jewelry, or vacation properties that you use primarily for personal use. Also you are not required to report a personal residence, or property exclusively related to your active business.

Penalties for not reporting foreign income? 

The Canada Revenue Agency imposes hefty penalties for not reporting foreign assets over $100,000. The current penalty is $25 a day to a maximum of $2,500 per year. The foreign reporting requirement was implemented back in 1998. To avoid the penalties this reporting can be made through the Voluntary Disclosure Program (VDP). 

Download Foreign Income Reporting T1135: Tax Accountant

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Cheema CPA Professional Corporation – Chartered Professional Accountants  is an accounting firm located in Brampton, Ontario. We can professionally prepare pare your personal income taxes and make sure that your foreign income is reported correctly on the T1135. We can help file the T1135 for past years and for over due returns. We can help reduce the penalties and interest by using the Voluntary Disclosure Program.

Universal Child Care Benefits

Universal Child Care Benefits

Universal Child Care Benefits

Universal Child Care Benefits

The Universal Child Care Benefits (UCCB) was introduced back in 2006 as a taxable benefit for Canadian families. This benefit is different from the Canada Child Tax Benefit (CCTB). The UCCB was $100 per month per child under the age of six. The government enhanced this benefit in 2015 by increasing the amount to $160 per child under the age of six. Also the government expanded the benefit to include $60 per month for children aged six through 17.

UCCB payments are taxable. At the end of the year the government issues RC62 slips which outlines the total benefit paid out and has to be included into your income.

Who qualifies for UCCB?

To receive the UCCB benefit you have to meet the following four conditions:

  1. You have to live with the child and the child has to be under the age of 18
  2. You must be the person who is primarily responsible for the child’s care and upbringing
  3. You must be a resident of Canada

When to apply for UCCB benefits?

It is critical to apply for UCCB benefits as soon after one of the following takes place:

  1. your child is born
  2. a child stats to live with you
  3. or you become a resident of Canada

How to calculate UCCB amount for 2015-2016?

  • $160 per month for each child under the age of six
  • $60 per month for each child aged 6 through 17

Explnation of how the UCCB has changed over the last year:

CRA Arbitrary Tax Assessment

Arbitrary Tax Assessment

Arbitrary Tax Assessment

CRA Arbitrary Tax Assessment

What happens when you don’t file income tax returns, HST returns, or corporate tax return? The CRA files your taxes for you. That’s right, they calculate your income based on past years income and assess you an arbitrary tax amount. The arbitrary assessment amount usually does not take into account any of the tax credits or breaks that could apply. The CRA will apply interest and penalties on the arbitrary amounts and send out a notice of assessment.

The process usually starts with few letters and followed by phone calls. If the CRA does not receive an answer, the next step is the arbitrary assessment. This is usually when clients call and need our assistance. We have the expertise to file your back taxes and get the arbitrary amounts corrected through appeals and amendments. We prepare and file the returns with great detail to avoid unwanted audits and future re-assessments.

The best way to avoid this hassle is to file your back taxes even if you are not able to pay off the taxes owing. We have the expertise to negotiate with the Canada Revenue Agency to setup a payment plan until the amounts are paid off.

Contact our tax accounting firm located in Brampton and Mississauga for all your back tax needs. 

Interest and penalties

Interest

If you have a balance owing for 2014, the CRA will charge compound daily interest starting May 1, 2015, on any unpaid amounts owing for 2014. This includes any balance owing if we reassess your return. In addition, the CRA will charge you interest on the penalties starting the day after your return is due. The rate of interest we charge can change every three months. See Prescribed interest rates.

Late-filing penalty

If you owe tax for 2014 and do not file your return for 2014 on time, the CRA will charge you a late-filing penalty. The penalty is 5% of your 2014 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.

If the CRA charged a late-filing penalty on your return for 2011, 2012, or 2013 your late-filing penalty for 2014 may be 10% of your 2014 balance owing, plus 2% of your 2014 balance owing for each full month your return is late, to a maximum of 20 months.

 

Foreign Income Reporting T1135: Tax Accountant

Foreign Income Reporting T1135: Tax Accountant

T1135 Foreign Income Reporting

T1135 Foreign Income Reporting

 

Canadians that have accumulated wealth in other parts of the world need to be aware of the Canadian reporting requirements. If you are a Canadian resident you are required to report foreign assets which have a cost value of over $100,000. On a personal income tax return you must answer “Did you own or hold foreign property at any time in the year with a total cost of more than $100,000 Canadian?” If the answer is yes to this question, then you would be required to file the T1135. Over the past few years the foreign reporting requirements have changed which are outlined on the newly redesigned T1135 (Foreign income Verification Statement) tax forms.

Where to disclose my foreign assets?

Canadian resident taxpayers are required to file T1135, with their T1 personal income tax return if at any time in the year the total foreign property they hold was more than $100,000 (Canadian). The CRA will impose hefty penalties if this form is not filed. For 2014, taxpayers can file form T1135 electronically, but corporations must still file a paper version of the form.

Examples of foreign property that needs to be disclosed?

Cash, stocks, bonds, land and buildings which are located outside Canada. Other foreign property that would be disclosed on the T1135:

  • Funds held in foreign bank accounts
  • Shares of foreign corporations, foreign mutual funds
  • Foreign investments
  • Interest in foreign insurance policy

For the full list refer to the T1135 form.

Examples of foreign property that does not needs to be disclosed?

You are not required to report personal properties such as art, jewelry, or vacation properties that you use primarily for personal use. Also you are not required to report a personal residence, or property exclusively related to your active business.

Penalties for not reporting foreign income? 

The Canada Revenue Agency imposes hefty penalties for not reporting foreign assets over $100,000. The current penalty is $25 a day to a maximum of $2,500 per year. The foreign reporting requirement was implemented back in 1998. To avoid the penalties this reporting can be made through the Voluntary Disclosure Program (VDP). 

Download Foreign Income Reporting T1135: Tax Accountant

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Cheema CPA Professional Corporation – Chartered Professional Accountants  is an accounting firm located in Brampton, Ontario. We can professionally prepare pare your personal income taxes and make sure that your foreign income is reported correctly on the T1135. We can help file the T1135 for past years and for over due returns. We can help reduce the penalties and interest by using the Voluntary Disclosure Program.

Universal Child Care Benefits

Universal Child Care Benefits

Universal Child Care Benefits

Universal Child Care Benefits

The Universal Child Care Benefits (UCCB) was introduced back in 2006 as a taxable benefit for Canadian families. This benefit is different from the Canada Child Tax Benefit (CCTB). The UCCB was $100 per month per child under the age of six. The government enhanced this benefit in 2015 by increasing the amount to $160 per child under the age of six. Also the government expanded the benefit to include $60 per month for children aged six through 17.

UCCB payments are taxable. At the end of the year the government issues RC62 slips which outlines the total benefit paid out and has to be included into your income.

Who qualifies for UCCB?

To receive the UCCB benefit you have to meet the following four conditions:

  1. You have to live with the child and the child has to be under the age of 18
  2. You must be the person who is primarily responsible for the child’s care and upbringing
  3. You must be a resident of Canada

When to apply for UCCB benefits?

It is critical to apply for UCCB benefits as soon after one of the following takes place:

  1. your child is born
  2. a child stats to live with you
  3. or you become a resident of Canada

How to calculate UCCB amount for 2015-2016?

  • $160 per month for each child under the age of six
  • $60 per month for each child aged 6 through 17

Explnation of how the UCCB has changed over the last year:

CRA Audit of Moving Expenses

 

CRA Audits Moving Expenses

CRA Audits Moving Expenses

CRA audit of moving expenses

The Canada Revenue Agency (CRA) allows taxpayers to deduct moving expenses if they move closer to work or school. To qualify, the new residence should be at least 40 kilometers closer to work or school (measured by the shortest usual public route).

In the case of Trudy Hauser (Taxpayer) vs. Her Majesty The Queen (The Crown), the CRA audited the moving expenses of the taxpayer.  The main argument became how each of the parties were measuring the distance between the old home and the new place of work. The Crown had measured the distance using an urban route, which was the shortest distance. The Taxpayer had measured the distance using a rural route, which was the fastest route. The Taxpayer had indicated that the urban route was inefficient because of the construction on the route.

Despite the Taxpayers testimony and evidence The Tax Court sided with the Canada Revenue Agency and concluded that the urban route is the most appropriate route to measure the distance between the new place of work and the old home.

Read more about Trudy Hauser  case – CRA Audit of Moving Expenses below:

Download (PDF, Unknown)

Audit & Appeal

Our team is dedicated to assist you in all your CRA appeals. We make sure that your company’s tax audit is handled smoothly and efficiently. We can assist you with the tax audit process starting from the information gathering stage to negotiation with the tax authorities. We can also help in negotiating payments and even apply for interest or penalty relief.