Tax returns for many Canadian require no more information than what is contained in CRA's files. For these individuals, I only need CRA's data and my client's agreement to prepare their tax return. This reduces the aggravation of gathering together scattered tax slips and allows the completion of all our transactions in one meeting.
However, most tax returns require more information then held in CRA’s files. See Information Required below for list of potential data requirements. Completion of a tax returns requiring additional information is dependent upon data provided by the clients. The client knows best the details of each entry and a review of this information, before it is submitted for processing, benefits both the client and the person preparing the return. It could encourage questions revealing potential tax credits; at the very least, it provides a better evaluation of the final result. My guarantee to cover penalty and interest caused by an error apply only if the error is mine, not if the information provided is incorrect or garbled. Take the time to review your documents and if there is a question, contact me any time during the year; I'm glad to help.
When I prepare a return, I make available a folder to be used to collect next year’s documents. Use this folder to limit document loss and to write in it information not recorded elsewhere. Your cooperation in maintaining organized records makes your income tax experience less frustrating, minimizes my time and your cost.
For new clients, I require the following information, return clients need only to indicate changes.:
- Name and Address
- Birth Date
- Social Insurance Number
- Marital status
- Number of dependents – Child/Parent*
- Phone numbers - home/work
- Email address (optional receipt of CRA correspondence through “My Account”)
- Bank account information for Direct Deposits
Also, if you have amounts not on a document
- Other Income
- Rent or municipal Tax Receipts
- Support Payments
Sample list of possible documents required:
If you have a large number of documents, it's helpful to summarize values and provide a count of each type
- Tax slips examples - (T3, T4, T5, RC62) plus receipts for:
- Charitable Donations
- Interest on student loans
- Federal Home accessibility Tax Credit.*
- RRSP Contributions
- Union or professional dues
- Child care expense
- Moving Expenses*
- Net Medical Expenses
- Seniors' Public Transit Tax
- Tuition Fees for occumatioanl skills, not necessarily at a post-secondary level
Notes: *Deductibility is conditional. Contact me for an explanation.
Some areas that can cause confusion.
Net Medical Expenses - NME
NME includes all medical payments made for every member of the family less reimbursed amounts. This includes medical insurance premiums paid directly or by way of a payroll deduction. Most medical expenses are easily identified however, there may be questions concerning some purchases. Contact me for clarification.
Summation of NME is error prone. It would be helpful if you sorted and counted receipts by family member.
NME deductions are allowed only if greater than 3% of income. Therefore, there are many returns where the claim for NME has no impact. If you’re not sure you should take the time, contact me with an estimate of your NME and we can decide.
This deduction if further complicated since a claim in any one year can covers any twelve months ending in the current tax year. Taking advantage of this anomoly requires insight into future medical expenses and is usually limited to the twelve months in the current tax year.
Child Care and Child Arts Amounts
These deductions require receipts showing the dates the service was provided and summarized by child. Child care requires the name of the person (with SIN) or organization. Child Arts ($500) requires the name of the organization and type of service provided.
Capital Gains / Losses
Capital Gains/Losses are generated on the sale of an asset. A capital gain or loss is the difference between the proceeds from sale of an asset and its adjusted cost base (ACB). The ACB is the cost of the asset plus or minus amounts which modified the asset's value. The taxpayer is expected to have knowledge of all such transactions and to maintain appropriate records. If the asset is a marketable security (i.e. stocks), investment advisors may provide the ACB as part of their serv ice package. If not: maintenance of such information is an accounting service I offer at a negotiated rate.
The gain or loss on the sale of a personal residence is generaly exempt from income tax. This exemption is available only to Canadian residents and only one property per family can be so designated.
Students can claim the Federal tuition tax credit. Some of these credits may be transferred to a parent. However, Canadian students attending a Canadian University must provide form T2202 which is normally downloaded from the Universities’ web site. No other documentation is accepted. If the tax credit is to be transferred to a family member then the bottom of page 2 of form T2202 must be signed.
A loan may have been made under the Canada Student Loans Act, the Canada Student Financial Assistance Act, or similar provincial or territorial government laws for post-secondary education. If so, only the student can claim the interest expense for this loan and must be supported by an official receipt. This tax credit cannot be transferred to another person.
If the student has no tax payable in the year the interest is incurred, CRA allows this tax credit to be carried forward for five years. It is prudent to claim this expense in the year it was paid (unused credits are automatically carried forward) to establish its validity and eliminate the possible loss of the documentation.
You cannot claim student loan interest paid on any other kind of loan, or on a student loan that has been combined with another kind of loan. If you renegotiated your student loan with a bank or another financial institution, or included it in an arrangement to consolidate your loans, the interest on the new loan does not qualify for this tax credit.
Costs of student residences qualify, on the student’s return for the Ontario Trillium Benefits. On campus residence receive a $25 credit requiring no receipt. Off campus residence require a receipt, for each residence, indicating the address, amount & number of months paid for the taxation (not the school) year, plus the landlord’s name and address.
Care Giver Amounts
If, at any time in 2017, you maintained a dwelling where you and one or more of your dependants lived, you may be able to claim a care giver tax credit. Each dependant must have been 18 years or older and dependent on you due to an impairment of physical or mental functions. If the dependant is your parent or grandparent, he or she had to have been born in 1952 or earlier. These tax credit amounts are limited by the dependant’s income.
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