How to Avoid CRA (Canada Revenue Agency) Audit?

accountant, cpa, ca, cga

  • Chances are that you know somebody who does not report all his/her income in tax return or report extra expenses to get higher refund. Also, most of the people are not interested in reporting the tax evasion to CRA. There are serious consequences for filing incorrect tax return. 
  • We suggest to remember following point to keep tax man at bay:

  1. Report all your income. Check CRA web site to make sure all T slips (i.e. income slips) have been reported. Our research shows most of the times mistakes happen in calculating taxable capital gains, 
  2. Claim tax credit correctly. There are some tax credits CRA loves to review such as tuition fee transfer, significant donation amount, and travel expense details etc.,
  3. Claim only realistic expenses. For example, if you claim auto expenses over 90% as business expense, CRA may ask you to show travel log book.
  4. Showing business loss all the time is not advisable. CRA understands that not every new business makes profit in first few years but you cannot have a business to create loss. 
  5. Make sure your HST calculations are accurate and returns are up to date 
  6. Remember, once CRA finds something wrong in your return, you will be in their radar for long time. Let us know if we can help you to keep your taxes on check.

New Canadian

CPA, Bookkeeping, tax

  • When you decide to become a Canadian resident, you deemed to have disposed of and re-acquired any property owned immediately prior to establishing residency in Canada at the fair market value of the property at that time. However, this change does not trigger any tax liability in Canada instead fair market value established a new cost base for the property. Certain types of property are excluded though. This is important for tax planning point of view. For example, it would be beneficial in disposing property if the result is a loss to offset gains or income in the country from which you are emigrating.

Foreign property reporting

bookkeeping, cga, tax

  • Individual, Partnership or corporate foreign property, such as shares, bank accounts, and real property with total value (at any time) more than $100,000 must be reported in form T1135. This forms needs to be filed annually by April 30 of the following year which it relates. The penalty for not filling or late filling T1135 is greater of $100, and $25 per day to a maximum of 100 days. Additional penalty will apply if failure to file was done intentionally.

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