As tax time draws near no doubt you are giving your tax affairs some thought. This past year there has been a lot of emphasis on off shore accounts that were not being claimed and basically it centers around tax evasion. This has caused the CRA to update their T1135 form regarding foreign investments. Now for those that have an obligation under this area of the tax law, for some they have concerns.
There are some individuals who have not been totally honest with their tax filings in respect to foreign investments under the assumption that their dealings were not significant enough or that the CRA would never really find out about them. Now with the recent crack down on this area of tax it is making some people nervous.
If you find yourself in this in this situation it would be far better for you to consider Voluntary Disclosure rather than just sneak in your foreign involvement for this year’s taxes.
Usually this type of disclosure pertains to issues or information that is over one year due. So if you held back information for last year’s taxes pertaining to your taxes and not just referring to foreign investment either, you could have a Toronto accountant do an amended tax return for you. If It is longer than a year then you need to follow the disclosure format.
Basically any action that you took that would affect the outcome of your taxes in favor of yourself which means that you did not meet your tax obligation is what you would have to disclose. For example, you may not have declared your foreign property investments, or you under estimated them to keep you in a lower tax bracket.
If you decide that you really want to get back on track and reveal everything that you held back, which is one of the criteria of the disclosure, then you would need to file a RC199, which is a tax payer agreement. For the present taxes regarding your foreign investments you need to file the new version of the T1135.
Ideally you should retain the services of a quality Toronto Accountant to assist you with your Voluntary Disclosure, your T1135 and your entire tax return. If you own your own small business it is always a good idea to use the same accountant for both your business and personal taxes as we discussed in another post.
