Personal tax return checklist
Employment income (T4)
Employment insurance benefits (T4E)
Interest, dividends, mutual funds (T3, T5, T5008)
Tuition & education receipts (T2202A)
Universal Child Care Benefit (RC62)
Old Age Security and CPP benefits (T4A-OAS, T4AP)
Pensions and annuities (T4A)
Social assistance payments (T5007)
Workers’ compensation (T5007)
Support for a dependent such as child, spouse or common-law partner
Expenses such as:
- Home office
- Tools (trades persons & apprentice mechanics)
- Professional or union dues
- Exams for professional certification
Charitable / Political donations
Interest paid on student loans
Carrying charges and interest expenses
Corporate tax return checklist
Balance Sheet at the fiscal year end
Income Statement for the fiscal period
General Ledger for the fiscal period if applicable
Bank statements if the bookkeeping is not complete
Copy of prior fiscal year end Notice of Assessment
List of shareholders (and their SIN or BN if applicable)
Incorporation documents if this is first fiscal year end
Self-employed business tax return checklist
Assets purchased greater than $500.00
Refer to Personal tax list & Business filing information below
CRA requires that receipts be kept for all expenses claimed in the tax return.
There are differences in the expenses that self-employed individuals, commission employees and other employees can claim.
Self-employed individuals use the form T2125.
Commission employees and other employees use the form T777. Commission employees such as car salesmen can claim tax return preparation fees as well as house insurance and property taxes when they have an office in their home.
Employees, other than commission employees, can only claim heat and hydro if they have an office in the house.
What to expect if you are being audited
One day you might receive an unexpected phone call or a letter from CRA (formerly Revenue Canada). They will tell you that they want to meet with you and they want to see all your receipts for the current year, and possible the previous two years. Usually they like to audit at least two years to verify any major changes or discrepancies. They will suggest a date but if that date is not suitable for you they are usually quite accommodating.
When the day comes, one or two auditors might come to your house or office. They are usually very nice and polite. They will introduce themselves and will ask you many questions. Many questions may sound banal to you, but most questions have two meanings, the auditors are investigating your business without the appearance of doing so. Thus, it is important to have your accountant or tax preparer with you at that time, to interpret the meaning of those questions.
Then, they will ask you to see all your receipts, invoices and mileage records. Note that they need original documentation (i.e. canceled checks, receipts) to support the expenses. Credit card statements are not an acceptable form of verification. A list of all allowable expenses is available on this page. There several areas that they might want to investigate in detail:
Car use for business:
CRA wants you to keep a daily log of your car use for your business. This means that they want to see that each day you record the starting mileage, the name of the person(s) you visited and the relative mileage. If the use of the car is personal, you must so indicate in the car log. Then they want to see the total mileage for the year and the total mileage used for business for the year. These figures must agree with the mileage log. If you do not keep a mileage log book, they might agree on a percentage use of the car for business, but it will be much lower than you actual use. Thus, the first rule is to keep an up to date mileage log book. Keep all the original gasoline receipts. Credit cards statements are not acceptable.
Meals and entertainment:
CRA wants you to keep all receipts. On the back of each receipt you must write the name of the person(s) you invited out. You can also claim meal expenses that you occurred by yourself provided that you were at least 40 Km from home and that you can show that on that particular day you had to work out of town. Special rules apply for daycare providers.
Office in the house:
You must show that you an area of the house dedicated to meet clients and to perform your work. The area must be enclosed and must be furnished as an office. A room with a bed is not an office. You are allowed to write out a portion of the house use for business, a reasonable percentage is 10%. Special rules apply for daycare providers.
All other expenses:
The auditor will match your claims with all the receipts. If there is a discrepancy they will disallow the expense. Usually they will take all the receipts away for a few weeks and they will give you a receipt.
The outcome of the audit:
If you have kept all the required records and they match your claims on your tax return, you will receive a letter of thanks for your collaboration. If they do not match, you will receive a re-assessment with a bill. You will then have 20 days to pay or more interest will accumulate. Usually it is better to pay and then, if you think you have a case, to appeal.
The appeal process is very straight forward but there are specific steps to follow (see below). If the appeal procedure is not properly done, most likely you will lose the appeal.
The appeal process is very straightforward and if the letter of appeal is properly prepared and you have good grounds for the appeal then CRA will accept it. However, the letter of appeal must have a specific structure. If you do not follow the following procedure, most likely you will lose the appeal.
The letter must be addressed to the Chief of Appeals in your tax jurisdiction. If you live in Hamilton, Burlington, Oakville and surrounding areas you should use this address:
Chief of Appeals
PO BOX 2220
55 Bay Street North
The letter must have three sections:
- Subject with your SIN number, this can be worded as: Re: Objection to your re-assessment of my 2017 tax returns SIN ???-???-??? following an audit.
- Facts. This is the most important part of the letter. You must state only the bare facts with no extra commentary. State only the necessary information that proves that you are correct. Keep this part of the letter short and to the point.
- Remedy: If you think that your original filing was correct, then write this section as follows: my tax return for the year 201? Should be assessed as filed.
- Sign the letter, add your address and phone number.
You might have to pay the due taxes after an audit but you might suffer hardship if in addition to the taxes you also have to pay a large amount in penalties and interest. In this case you can write to the Fairness Committee at you tax office proving hardship and asking them to remove the penalties and interest following the audit.
Tax implications of divorce or separation
You are separated if you have been living apart from your spouse or common-law partner for 90 consecutive days or more because of a breakdown in your relationship, you have not reconciled and you receive the Canada child tax benefit (CCTB) you should file immediately the form RFC-65, ELECTION TO CHANGE MARITAL STATUS.
The reason is that you receive the CCTB according to your family income, husband and wife combined income. At separation the family income decreases, only one person can claim the children as equivalent to married and therefore, the CCTB will increase.
To continue receiving the CCTB, you and your spouse or common-law partner have to file a tax return every year, even if you have no income to report. CRA base the amount of the benefits you receive on the number and ages of the children you have, and on information from your and your spouse’s or common-law partner’s tax returns.
There are also new implications on the separation of common-law spouses.
In December 2002, the Supreme Court of Canada stated that the law does not have to treat common law spouses like a married couple when it comes to dividing most assets equally in a breakup. In an 8-1 decision the high court ruled that individuals who do not walk down the aisle make a free and deliberate choice not to assume the legal rights and obligations toward property that marriage brings. Many believe that after two or three years, the law treats them the same as married couples even without the marriage certificate. This is not correct and in case of breakup you should contact a family lawyer.
In a common-law relationship it is better to put in writing who owns what and when major purchases are made like buying a house or a car. It is not the same. When you’re common-law, it’s not the same as being married
Common-law partners who split still face the same spousal and child-support obligations as divorcing married couples, based on need and dependency, but property is a different matter, the court said.
The high court stressed its decision does not mean a common-law partner has no recourse, or can’t expect to ultimately get an equal share of the property. Common-law couples are free to draw up a contract at the outset if they want an equal division of property upon breakup, or a partner can sue an ex for a share of the wealth he or she contributed to.
Litigation can cost anywhere from $20,000 to $50,000, depending on how bitterly contested the dispute is, thus it is better to sign contracts and to keep records of how much each contribute to major purchases during the relationship.
Most provinces — Ontario, Alberta, Manitoba, New Brunswick, Prince Edward Island and Newfoundland, as well as Yukon Territory — have laws that compel only married couples to split property 50-50. In Quebec, British Columbia, and Nova Scotia, couples can register a relationship, a civil union or sign an agreement to opt in to the 50-50 split. Only Saskatchewan, Northwest Territories, and Nunavut automatically extend the presumption of equal asset division to common-law couples.
Revenue Canada in some cases allows the deduction from total income of the expenses incurring in moving to a different location for the purpose of starting a new job or moving to school. You may deduct your expenses if ALL of the following are true:
You moved to start a job or a business, or you moved to attend full-time post-secondary courses at a university, college or other educational institution.
The move was from one place in Canada to another place in Canada. However, if you were a “factual resident” or a student who lives outside Canada, you may possibly qualify.
You can only deduct expenses from income or scholarship earned at the new work/school location, not from employment insurance benefits or investment income.
In calculating your deduction, you must subtract any moving grant, allowance or reimbursement you received from your employer or a government department (such as Human Resources Development) from your eligible moving expenses.
You must keep receipts in case CRA asks to see them later. The receipts are not filed, but must be retained by the taxpayer.
As a student you can only deduct expenses up to the amount that you have included on your return as award income such as fellowships, bursaries, scholarships and research grants. Also, the move had to have brought you at least 40 kilometers closer to your educational institution.
If you are a student who moved to start a job, including a summer job, or to start a business, you can claim moving expenses.
You may be enrolled in a co-operative program which requires you to attend school for an academic session and then work for a similar period. You may deduct eligible moving expenses from income earned at your new work location. When you return to school, you may only claim moving expenses against your award income as explained earlier.
Eligible Moving Expenses
You can deduct reasonable amounts that you paid for moving yourself, your family and your household effects. Not all members of your household have to travel together or at the same time.
Eligible moving expenses include:
Traveling expenses from old residence to new residence (automobile expenses, meals, and accommodation).
Transportation and storage costs for household effects (packing, hauling, in transit storage and insurance).
Maximum of 15 days’ living expenses near new or old residence (hotels, meals). A recent tax court interpretation held that the taxpayer could use any 15 days, not necessarily the first 15. If, for example, the employer paid the first 10 days’ accommodation at the new location, then the taxpayer can still claim days 11 through 26 if temporary accommodation was still required.
Cost of canceling the lease for the old residence.
Cost of selling the old residence (advertising, notarial or legal fees, real estate commissions and mortgage penalty when the mortgage is paid off before maturity.
Cost of purchasing a new residence (legal fees, taxes paid for the transfer or registration of title) NOTE: You can only claim these costs if you or your spouse are selling or have sold your old residence.
Moving expenses include mortgage interest, property taxes, insurance premiums and the costs associated with maintaining heat and power, in a vacant old residence. The allowable deduction is claimed on line 9 of form T1-M “Claim for Moving Expenses” and is equal to the least of the following amounts:
The actual amount of maintenance expenses or $5000
You can also deduct the cost of revising legal documents to reflect the address change, replacing a driver’s license or automobile permit and utility hookups and disconnections.
Records required from a private home back
Day care during an audit
Statement of income and expenses
Gross income with receipts
Income from child care for region children
Income from child care for private children
Important: keep records of how many children you had each day, full time and part time. Why? If not cra allows only six (6) dollars per child per day full time and three (3) dollars per child per day part time. You must also state at what time the children arrive in the morning and at what time they leave at night. Do you have children over the weekend? Are some areas of the house permanently set up as a day-care space or they are available to the family once the children leave. Keep a record of which rooms are used. Do you have a room used only as an office?
Expenses (note: these are the exact records that cra want to see in an audit, if you do not have them, they will disallow the expense)
Advertising (paper, radio, web site)
Extra household insurance
Repairs to home and breakages
Home supplies (e.G.: first aid supplies, cleaning supplies, dishes, towels, sheets)
Groceries: keep all receipts (see above).
Car (gasoline, repairs, insurance, parking, tolls)
Car mileage (you must keep a daily record of mileage, where you went and why. Which mileage is for business and which mileage is for pleasure? Keep totals for the year in a logbook. Cra wants to see the logbook or they will disallow the car expenses.
Play supplies (e.G.: toys, books, and creative supplies)
Postage & stationery, business cards
Accountant fees (Burlington tax service)
Household appliances & furnishings over $ 500.
Expenses occurred in outings
Telephone, only a business line or a cell phone are allowed as deductions at 100%. Use of the house phone for business is not allowed as an expense. Only long distance charges on the house phone.
Other itemized expenses, internet hook up, courses, cpr.
Mortgage interest (upon your request, the bank will provide a written statement in january)
Convenient service for seniors, physically challenged and hearing impaired individuals
No need to leave your home to meet with a tax preparer, call us and we will set up an appointment convenient to you.
Tax returns are prepared at your home and we file it for a flat rate of $ 79.64 (+ HST).
If you are entitled to a refund, Revenue Canada will mail it to your address or even better, it will deposit it automatically to your bank account.
If you are at least 19 years old, the Federal Government, might also send you up to $ 242.00 to reimburse you for some of the HST you spent during the year.
It is a good deal to file your income tax return even if you have a small or no income for 2017. We will even go to your house to file your return and you will receive your refund in about two weeks. A good deal.
You might also able to claim some moving expenses.
The scholarships are now tax exempt.
Electronic Filing (EFILE) of T1 Returns
Electronic filing (EFILE) is the preferred way to file your income tax return.
Your tax return is instantly sent to CRA computers at no additional cost to you.
With EFILE most refunds are in your hands within two or three weeks.
Burlington Tax Services has been an approved EFILE service provider since 1992.
We will also check and file tax returns you prepared with other tax software or manually.
Small Businesses and Corporations
Our philosophy is to work with you in identifying the solutions to personal and business problems relating to various tax related issues.
We want you to succeed by ensuring that all available avenues to minimize your overall tax burden have been exhausted and providing straightforward, clear advice and timely quality service tailored to your specific needs.
Our services include tax planning and compliance, optimization of business deductions (Proprietorships and Corporations), Incorporation, Bookkeeping, and HST returns.
We specialize in tax accounting for daycare providers, and in estate planning.
Business Filing Information
- Name of business
- Total income for the calendar year
- Purchases of goods and materials if you resell them as part of your business
- If you sell goods, inventory value on January, 1 and on December 31
- Amounts paid to a subcontractor
- Meals and Entertainment (write on the back of the receipt the name of the person you invited)
- Bad Debts – amounts that you do not expect to ever collect
- Insurance (liability and disability, life insurance is not allowed)
- Interest on money borrowed to run the business (get a statement from the bank)
- Business taxes paid to local municipalities, fees, licenses, dues,
- Business related memberships and subscriptions
- Office expenses (including, postage, business cards, stationery, telephone and other supplies)
- Supplies under $ 500 for any one item.
- Accounting (for example, Burlington Tax Services) legal, collection and consulting expenses
- Rent (if you had a store or if you rented a locker)
- Maintenance and Repairs, Leases of equipment, computers, etc.
- Salaries (including the employer’s contribution to CPP/QPP, EI, EHT, etc.)
- Travel expenses such as taxi, trains, airlines, car rental, buses and hotels
- Business Telephones (you are not allow to deduct the phone line in your home), cellular phones, pagers, etc.
- Other expenses such as utilities in your store, etc.
- Purchases of any supplies over $ 500 each such as computers, printers, furniture, software, etc.
- Delivery, freight and express, couriers
- Equipment rental
- Bank charges, credit card charges
- Conferences and Meetings
- Equipment rental
- Premiums paid for coverage under a private health services plan
- Car mileage (it is very important to keep a daily log of business and personal mileage)
- How much you spent in gasoline
- Car repairs
- Car Insurance
- Leasing costs if you do not own a car
- How much to spent to buy your car and in which year (if car is not leased)
- Car License
- Automobile Club
- Parking fees
- If you borrowed money to buy the car, how much interest did you pay the bank (the bank will let you know if you ask them)
- If you have an office in the house:
- How much did you spend to heat the house during the year?
- Electricity for the year
- House insurance
- House maintenance such as painting, house repairs, etc.
- Interest on the mortgage (the bank should have sent you a statement in January)
- Property taxes on the house
- Other expenses, for example cable TV if you have a daycare business