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It’s that time of year. Mark your calendar for these important tax filing milestones:
In a paper titled The Mystery of Unclaimed Tax Benefits published in 2020 the authors found that about 10 to 12 per cent of Canadians don't file their tax returns. And if we look back almost a decade ago (2015) researchers estimated that the benefits lost to working-age non-filers was about $1.7 billion. That number has to be higher today, especially with all the new inflation protection measures being announced recently.
Did you set up an inter-spousal loan to do some investment income splitting last year? You would have been wise to do it within the first two quarters of the calendar, when the prescribed interest rate was 1% – compared to 4% today. Also wise: The borrower must pay the lender the interest by January 30 – less than a week away – or the arrangement will be nullified.
Taxpayers who claim auto expenses, commonly commission sales people, the self-employed and employees who wish to reduce their annual auto standby charge on their employer-provided vehicle, will know that keeping an auto log is mandatory to succeed in a CRA review of their tax filing. But after a “pandemic holiday” on keeping strict records, tax filers will have to create a new base year log to meet audit requirements.
Did you know there are taxpayer relief provisions to lean on if you have run into hard times and can’t pay your tax bill? But you’ll need to understand the fine print – financial hardship isn’t usually a good enough reason not to pay, and you’ll always have to pay the taxes. The relief CRA can grant you is limited to waiving penalties and interest. Here’s how to access these rights: