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Personal Income Tax |
Payroll |
RRSP's |
G.S.T. |
When is my T1 Return due?
Generally,
your return has to be filed on or before April 30. If
you or your spouse or common-law partner carried on a business in
the taxation year (other than a business whose expenditures were mainly in connection
with a tax shelter), your return has to be filed on or before June
15.
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What's the penalty for missing the deadline to file your personal income
tax return?
You should
always send your tax return by the annual deadline. Even if you'll have
a balance owing that you can't pay right away, you should still file
on time to avoid the late-filing penalty.
The late-filing penalty is:
¢ 5% of the balance owing; and
¢ An additional 1% of the balance owing for each full month that
your return is late, to a maximum of 12 months.
¢ NOTE: The penalty may be higher if you've already been charged
the late-filing penalty in any of the three previous years.
If you missed the tax-filing deadline because of circumstances beyond
your control, CCRA may waive the penalty and applicable interest.
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Do I
have to file a return?
You have
to file a return for the tax year if any of the following applies:
¢ You have to pay tax for the tax year;
¢ We sent you a request to file a return;
¢ You have a taxable capital gain or disposed of capital property
(such as real estate or shares) in the tax year, or you claimed a capital
gains reserve on your prior year tax return;
¢ You have to pay back any of your Old Age Security or Employment
Insurance benefits
¢ You have not repaid all of the amounts you withdrew from your
registered retirement savings plan (RRSP) under the Home Buyers' Plan
or the Lifelong Learning Plan; or
¢ You have to contribute to the Canada Pension Plan (CPP). This
can apply if, for the tax year, the total of your net self-employment
income and pensionable employment income is more than $3,500.
Even if none of these requirements applies, you may still want to file
a return if any of the following applies:
¢ You want to claim a refund;
¢ You want to apply for the GST/HST credit;
¢ You or your spouse or common-law partner wants to begin or continue
receiving Canada Child Tax Benefit payments;
¢ You have incurred a non-capital loss in the tax year that you
want to be able to apply in other years;
¢ You want to carry forward the unused portion of your tuition
and education amounts; or
¢ You received income for which you could contribute to an RRSP.
To keep your RRSP deduction limit up to date, you would have to file
a return.
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How long do I have to retain books and records for income tax purposes?
The general
rule is that books and records have to be kept for a minimum of six
years from the end of the last tax year to which they relate. The tax
year is the fiscal period for corporations and the calendar year for
all other taxpayers.
Some exceptions are:
¢ For corporations, records have to be kept for two years from
the date of dissolution (in the case of amalgamations or mergers the
books and records have to be retained on the basis that the new corporation
is a continuation of each amalgamating corporation) and
¢ Books and records may be destroyed at an earlier time than outlined
above if you request and receive written permission from the minister.
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RRSP'S
How
much should I contribute to my RRSP's?
Making
the maximum contribution to your RRSP is likely the safest tax-sheltered
investment available. The immediate benefits are twofold: tax savings
in the year of contribution, and tax-deferral on the income earned by
the RRSP investments until withdrawal, hopefully at the time when you
retire. Generally, the maximum amount that is tax-deductible is 18%
of your previous year's earned income to a maximum of $18,000. Earned
income includes: salaries or wages net of employment expenses claimed;
research grants; royalties; net income from self-employment; net rental
income from real property; alimony and maintenance received; and supplementary
unemployment benefit plan payments.
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What happens if I over contribute to my RRSP?
If you
contribute more than your contribution limit, you will be subject to
a 1 percent penalty tax per month to the extent that the over-contribution
amount exceeds $2,000.
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You're
responsible for deducting income tax, Canada Pension Plan (CPP), and
Employment Insurance (EI) premiums from your employees' paychecks. You
are also responsible for remitting this money to Revenue Canada at regular
intervals, usually on or before the 15th day of the month following
the month in which you deducted it. It's a good idea to remit payroll
deductions on time. If your payment is late, you will have to pay a
penalty.
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You need
to register for a GST/HST account if you business meets one of the following
requirements:
¢ Your annual worldwided GST/HST taxable revenues, including the
taxable revenues of all of your associates, will be more than $30,000;
¢ you operate a taxi or limousine
¢ you are a non-resident who solicits orders in Canada for goods
sent by mail or courier and your annual worldwide GST/HST- taxable sales
will be more than $30,000; or
¢ you are a nonresident and you charge admission directly to audiences
at activities or events in Canada.
If your
goods and services are GST/HST taxable, but your sales are less than
$30,000, you may choose to register voluntarily.
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What penalties and/or interest are involved with G.S.T?
CCRA charges
penalties and interest on:
¢ any net tax still owing after the due date;
¢ late or insufficient installment payments; and
¢ unpaid penalties and interest
The penalty is 6% a year. CCRA charges interest at a prescribed rate
that is adjusted quarterly. CCRA calculates the penalty and interest
from the day after the due date of the demittance to the day we receive
it. The penalty and interest are compounded daily.
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Tarrabain Accounting - Phone: (780) 468-1898 - Fax: (780) 468-9354
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Tarrabain Accounting 2007
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