All too often we have a tendency to listen to others when it comes to tax matters. It can become a topic of conversation amongst social gatherings for example, and the tax regulations can actually become misconstrued which can lead an individual to making big mistakes with their tax filings.
A good example is how many people assume that when they got their notice of assessment back from the CRA that this is the end of the taxes for that applicable year. They are not going to have any further dealings with the taxman for that specific year. This is a fallacy because the CRA can re-assess at a later date when they have more time to scrutinize tax returns either at random, or because something didn’t appear quite right. Just because you have been allowed a particular claim during this initial assessment doesn’t mean the CRA can’t change this. This could happen up to three years of your filing.
There are a lot of people that have no incentive for obtaining a raise or a higher paid position at their place of employment because they simply feel it just means paying more taxes because they are now in a higher tax bracket. This is true, but do keep in mind that you will only be paying the higher tax rate on the pay increase that put you into the higher tax bracket, and not all of your income.
When it comes to looking for tax incentives offered by the Government these often get misconstrued as well. A lot of people think that they cannot qualify for the RRSP Home Buyers Plan if they owned a home before. In reality though, first time buyers are those who have not been in ownership of a principal residence in the last 5 calendar years including the current year.
The message here is that when it comes to taxes don’t rely on information from friends and family. Go to an expert like a Toronto accountant who has the training, knowledge and expertise in this area. You can save yourself a lot of potential tax grief and hassles by doing so.
