Since personal tax time is upon us it’s time to prepare for the filing of your 2014 personal tax return. As we do every year, we would like to outline several things that will make your filing as efficient as possible for both you and our firm.
Forms and schedules
Please remember that we are not necessarily intending you to complete each document. These forms and schedules are only intended to provide a comprehensive list and overview of what may be included in your tax return. Please disregard what you feel may not be relevant to your personal tax situation.
- Engagement Letter (mandatory)
- Personal Tax Organizer (mandatory)
- Self-Employed Business Activity Checklist
- Rental Activity Checklist
- Commission/Employment Expenses Checklist
- Form T1135 Permanent Changes for 2014 and Beyond
Responsibility for Filing
We appreciate the opportunity to work with you and advise you on income tax matters, including the preparation of your tax return. Legislation allows the Canada Revenue Agency (“CRA”) to impose penalties upon you as the taxpayer, and upon us as a tax return preparer, for failure to observe due care in reporting on your income tax returns. In order to ensure an understanding of our mutual responsibilities, we ask all clients for whom we prepare tax returns to confirm our arrangements by signing the enclosed engagement letter and returning it with your tax information. Please ensure your spouse and children sign as well if we will be preparing their returns. As the engagement letter provides certain representations including the representation of your foreign asset holdings we cannot file your tax return without a signed copy of this letter.
It’s our responsibility to prepare your tax return accurately according to the law and the information that you have provided. It is your responsibility to provide us with all the information required to prepare complete and accurate returns. You should retain all the documents, cancelled cheques and other data that form the basis of your income and deductions as we will not be retaining them. These may be necessary to prove the accuracy and completeness of the return to the CRA. You have the final responsibility for the income tax return and, therefore, you need to review it carefully and notify us of any issues needing to be addressed.
Filing Deadline
Your 2014 tax return (other than for self-employed) must be filed by April 30, 2015. However, you must have your 2014 tax information to our office by April 2, 2015 to ensure it is filed on time. For 2014 returns we are required to file your personal return electronically.
Self-employed individuals have until June 15, 2015 to file their tax returns; however, the CRA will impose interest on any unpaid tax from April 30, 2015. Therefore, we recommend you have your return prepared before the end of April so that any liability can be paid as required in order to minimize interest charges.
Getting Prepared
Please review your 2013 tax return to determine the sources of income and expenses that you reported. This will be a good indication of what information you should be accumulating for your 2014 tax return. Also, consider any new sources of income or deductions you had in 2014.
We have included a 2014 personal tax organizer to help jog your memory. We have also included a self-employed business activity checklist, rental activity checklist, and commission/employment expenses checklist should you have any related income or expenses to declare.
Please forward your information to our office as soon as possible. If you need to discuss any specific matters, please call to discuss or to arrange an appointment.
We can accept your tax information electronically and if you would like to send your information to us online please contact us so we can arrange to do this through our secure portal.
Permanent Changes in T1135 Foreign Reporting Requirements for 2014 and Beyond
Further to the “transitional rules” announced by the Canada Revenue Agency for the 2013 tax year, permanent changes were subsequently implemented to Form T1135 for 2014 and beyond. As the changes are considerable please review the enclosed document.
In the document you will see that more detailed information is required to be reported on Form T1135. As a result, this could increase your compliance costs including the cost to have this completed in conjunction with your tax return.
Electronic Filing
Once we have completed your tax returns we will email you a T183-Authorization to E-file. We are required by CRA to have the form signed and on file before electronically filing your return. Please ensure you indicate your confidential e-mail address on the attached personal tax return checklist. We will e-mail these forms to you unless you indicate otherwise. Please review, sign, and return the form as soon as possible so we may electronically file your return.
CRA Authorization
In order for us to obtain information from the CRA we are required to have a T1013 Consent Form filed with the CRA. If we do not already have one on file for you, we will forward one to be signed and returned.
Installment Payments
It is very important to make the required quarterly installments to minimize installment interest and/or penalties. If you are required to remit quarterly income tax installments, your first payment for the 2015 calendar year is due by March 15, 2015.
Payment
May we remind you that payment for preparation of your 2014 personal tax return is payable upon receipt of your return.
You can make your payment by personal cheque, cash, debit (in office only), Visa or MasterCard.
Tax returns will not be E-filed or released until payment is received in full.
If you have any questions regarding the filing of your personal income tax return, please do not hesitate to contact us.