Who has to file a tax return, when, and how?
Every Canadian resident has to file an annual tax return regardless of their income.
- Individual tax payers (non business) have to file a T1 return by April 30th.
- Non-corporate businesses have to file a T1 return along with other necessary forms by June 30.
- Corporations (private, public, and non profits) have to file a T2 return within six months of their fiscal year end.
- Trusts (all kinds) have to file a T3 return within six months of their fiscal year end.
If the tax returns are not filed within the deadline, the CRA imposes 5% penalty on any taxes which were not paid by the due deadline. The payment deadline for individual tax payers and non-corporate businesses is April 30th although the tax filing dates are different. The payment deadline for corporations and trusts is usually within two to three months of the fiscal year end. The CRA may also impose additional penalties if the tax returns are consistently filed late over a period of few years.
How do I successfully pass an audit?
The CRA audits tax payers on a periodic basis to ensure tax payers are being compliant with the tax code. The audits can be initiated due to random selection, due to any inconsistency compared to previous years, or due to a red flag raised from a variety of other sources. In general, businesses (corporations) and trusts are audited more than individual tax payers.
When the CRA initiates an audit, it usually requests specific documents to test the validity of a certain figure claimed on the respective tax return. The key to passing an audit is to provide the requested documents to the audit officer within due time, along with the right explanations which will help to make their work easy and fast. To add further weight to a positive audit result, it helps a lot to have a competent accountant on your side who has a good reputation with the CRA and can communicate with the CRA in the right language.
How can we help you?
Whether you are an individual tax payer, a non-corporate business, a corporation, or a trust, we will help you file your tax returns accurately on time. In case of an audit by the CRA, we will help you through the process to successfully pass the audit. Utilizing our extensive knowledge base and years of experience, we will make sure that you avoid potential problems and red flags with the CRA.