Last Chance to File or Change 2005 T1 Returns

Although the government is limited to three years to reassess returns in most cases, taxpayers have 10 years to make changes to their returns.  That’s why it’s important to call clients now- especially delinquent filers to preserve tax filing rights.  Specifically, they will have until December 31, 2015 to make changes to or file their 2005 return before it becomes statute-barred.

Tax and financial advisors can provide real value here by suggesting some of the important reasons to file that return and make adjustments to 2006 -2014 returns, too:

• Recover Refunds.  Most taxpayers have a refund coming – but you can’t claim that refund if you don’t file a tax return.
• Earn RRSP contribution room.  If you had RRSP earned income in 2005, you’ll only be able to make RRSP contributions based on that earned income if you file a 2005 tax return.
• Claim capital losses.  Capital losses in 2005 can be carried forward indefinitely to reduce capital gains in any subsequent years.  You won’t be able to carry back capital losses to 2004 or 2003 anymore because those years can no longer be changed.  But again, if you don’t report the loss on your 2005 tax return, you won’t be able to apply it to subsequent gains.
• Claim unused charitable donations.  Donations made in 2005 can be carried forward 5 years; there may be some missed planning opportunities based on 2005 generosity.

For help, be sure to see a DFA-Tax Services Specialist.

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