Review your last year's Notice of Assessment or Notice of Reassessment to ensure that you agree with the findings.
You generally have until April 30th of the following year to file a Notice of Objection if you disagree with the findings.
And, after careful discussion with your tax adviser, consider a voluntary disclosure if you missed income from a prior year.
12) File on time
While your personal tax return may be due on April 30th or June 15th, your taxes owing will be due April 30th unless they were due earlier through installment requirements.
Although interest rates are currently relatively low, any interest due on late taxes or penalties are non-deductible.
Effectively, this raises your taxes as additional income is needed to cover these expenses. This triggers more taxes or eats away at your disposable income for, in most cases, no good reason.
Additionally, some penalties escalate if you miss more than one deadline. Finally, do you think that the Canada Revenue Agency (CRA) pays more attention to those who miss deadlines on a regular basis? This is not the kind of attention you want
13) Identify and disclose all foreign investments to relevant foreign governments
You must not only meet various U.S. tax requirements, but Canada wants to know about the existence of the rental property (as well as other foreign investments). And, of course, Canada wants the opportunity to levy taxes to the fullest extent possible.
Yes, this means that you could be paying taxes in both the host country and Canada. In most countries, including the U.S., foreign tax treaties help eliminate double taxation.
Planning in advance and filing the relevant U.S. and Canadian documentation on time not only reduces taxes, but avoids significant penalties.
The CRA has become much more aggressive over the past few years in assessing penalties for late disclosure of foreign assets and income. We expect this trend to continue.
14) Claim GST/HST rebates
While not directly related to your personal tax return, ensure that you have claimed any available GST/ HST and transitional rebates for new buildings (or substantially renovated buildings, for example) acquired in the year.
Different guides are available from the CRA to help you complete the relevant forms. At times, the vendor processes the claims for the purchaser, but may not properly complete this or provide you the full benefit of the eligible rebates.
Further, in different cases the purchaser is not supposed to even pay the vendor but rather submit payment and process the amount directly with the CRA.
There are cases of the purchaser essentially paying the tax twice - once to the vendor and, if the vendor does not properly remit to the CRA, the CRA has, in certain cases, the right to recover the payment directly from the purchaser...again.
15) Who owns what?
Using family trusts may provide opportunity to further reduce the overall taxes for the family as multiple individuals can absorb taxable income or gains when selling the property.
Further, in limited cases, the $750,000 exemption when selling can be used by each beneficiary of the trust where family members are typically the beneficiaries.
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11) Review last year's Notice of Assessment