I received an interesting call late Friday afternoon from a Canadian taxpayer who wanted to know more about the Canada Revenue Agency’s Voluntary Disclosure Program.
She said that she thought she was being “swindled”.
She called a “tax solution” type business and they said that for $3,000.00, they would “investigate” as to whether or not she qualified for the program.
To which I asked her this question;
“Has the CRA tried to get you to file outstanding returns, either by phone or by sending letters to you?”
“Yes”, she replied.
“Then you do NOT qualify for the program” was my response.
And I saved her $3000.00.
If the CRA has already reach out to you – or attempted to reach out to you – regarding unfiled returns or unreported income, then your disclosure is no longer voluntary.
For more information, read up on the CRA’s Voluntary Disclosure Program, through the CRA’s website, here. Or Google “CRA VDP” and refer to the websites beginning with http://www.cra.gc.ca, or http://www.CRA-arc.gc.ca/voluntarydisclosures
For those of you who prefer to wait until the last-minute to do your taxes – remember the deadline is May 5th, 2014 this year only – you might be just now looking for items to deduct in order to reduce an amount owing, or just because you have to get that information and now you are wondering if they are deductible.
Or, maybe your tax return has been completed for you and now you are holding the draft of that return and before you sign it – which tells the CRA that you agree with the information in it, so you cannot say I didn’t know what was being filed! – and you want to make sure your accountant / tax preparer did their job and notified you of all the eligible deductions you are entitled to, then this post will be quite useful to you!
The big question: What you can deduct?
When preparing your tax return there are many deductions and tax credits you may be eligible to claim in order to reduce the amount of tax you must pay, if they apply to you.
Any eligible deductions are reported on lines 205 to 485 of your personal tax return. More specifically, deductions from income and tax credits are reported on lines 205 to 485 and these lines are deducted from line 150 to give you your net income amount (line 236).
Here is a line index from the Canada Revenue Agency website listing the deduction and for more information you will need to follow the link and read the details.
Lines 244 – 260 are deducted from line 236 to give you your taxable income amount (line 260).
Lines 300 – 378 are non-refundable tax credits and reduce your federal tax. However, if the total of these credits is more than your federal tax, you will not get a refund for the difference. Remember to claim the corresponding provincial or territorial non-refundable tax credits to which you are entitled on your provincial or territorial Form 428.
Lines 405 – 485 are your federal and provincial or territorial taxes payable, your federal and provincial or territorial tax credits and your refund or balance owing amounts. The federal and provincial or territorial tax credits reduce your tax payable. If the total of these credits is more than your total tax, you could get a refund for the difference. Claim all available provincial or territorial tax credits on your provincial or territorial form which may be applicable to you.
Complete the provincial or territorial tax and credit forms for the province or territory where you resided on December 31, 2013.
Hope this help!