Tax and Accounting Resources

Tax Tips

Which CRA online service is right for you?

The CRA, (Canada Revenue Agency), provides three secure online services for managing a variety of tax affairs. My Account, My Business Account, and Represent a Client allow taxpayers or their representatives to interact electronically with the CRA efficiently and securely, for a variety of services. If you’re not sure which service you need, try our online questionnaire at www.cra.gc.ca/getonline. It will guide you in selecting and signing up for the service that’s right for you.

Report your tips: they are taxable income

The CRA is reminding Canadians who earn tips and gratuities that it is a taxable income and must be reported on annual income tax and benefit returns. Restaurant servers, hairdressers, valets, taxi drivers, and others who earn tips may not have all of their income recorded by their employers, which means that their T4 slips may not include all of their income.

Working for Cash

If you are a contractor and you begin a construction or renovation project, remember this: there are significant risks if you accept cash for the job without reporting your income. Contractors caught not reporting, cash income face serious consequences, such as penalties, court fines, and even jail time.

Benefits of Filing on Time and Online

Do you know?

That by filing your income tax return and paying what you owe on time helps avoid interest and penalty charges, and ensures that your benefits won’t be delayed.

FACTS:

  • You have until midnight on or before May 5, 2014, to file your 2013 income tax and benefit return.
  • If you or your spouse or common-law partner is self-employed, you have until midnight on June 16, 2014, to file your return.
  • Any balance owing must be paid on or before May 5, 2014—even if your return is due on June 16, 2014.

What happens when you do not file on time?

When you file your yearly tax return, you are letting the CRA know your current tax situation. Without that information, they are unable to determine if you are still eligible to receive certain benefit payments. If you don’t file on time, your benefit and credit payments (for example, the Canada child tax benefit and the goods and services tax/harmonized sales tax credit) may be interrupted.

Additionally, having a balance owed to the CRA and not filing on time, they will charge a late-filing penalty. The penalty is 5% of your 2013 balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months. Charged when a late-filing penalty on your return for 2010, 2011, or 2012, your late-filing penalty for 2013 maybe 10% of your 2013 balance owing, plus 2% of your 2013 balance owing for each full month that your return is late, to a maximum of 20 months.

In addition to the late-filing penalty, if you have a balance owed for 2013, there will be a charge, of compound daily interest beginning May 6, 2014, on any unpaid amounts for 2013. As a result of the five-day service interruption in April, interest and penalties will not be applied to individual taxpayers filing their 2013 tax returns by midnight on or before May 5. Even if you are unable to pay all of your balance owed, you should still file your return on time and call us at 1-888-863-8657 to make a payment arrangement. Remember when you file on time, you avoid penalty fees.

Need to Make Changes in your Return

This is easier than it would seem. If you realize a mistake, then contact the CRA and they will help fix it.

Want to Make Payments

Anyone has the ability to go online and make a payment not unlike paying a telephone or Hydro bill.

If you are a Part Time Residence

If you spend part of the year outside of Canada, in the United States (U.S.), for example, and you maintain residence Canada (that is, a home, a spouse or common-law partner, a property), we usually consider you to be a factual resident of Canada. This means you are liable for taxes.