Most people are just so happy to get their taxes filed and ready to be forgotten about for another year that they really don’t give much thought to the inner workings of the Canada tax department and their methods for verifying the multitude of tax returns they receive each year. Having a little understanding of the tax verification process will also help you to understand why you really should use the services of a Toronto tax accountant.
Things certainly have changed over the years thanks to the easy filing of tax returns over the internet. Although you can’t submit your receipts this way it doesn’t mean that the CRA may not ask to see them. Some people tend to think that they can extend their expense claims a little being as they are Efiling. This is a big mistake.
The tax system is designed to focus on three important areas of your return. These are the income that you are claiming, the deductions claimed against the income, and finally any tax credits that you are applying for.
Amongst the different processes to determine the validity of a tax return there may be a pre-assessment review. Then it moves onto a processing review and possibly a matching & audit program. Of course the CRA relies on modern technology, and the pre-assessments are pretty well covered with this method. The electronic review is high tech that can check the validity of the return and can ascertain if the deductions and the various claims on the return are correct.
As you may be aware there are usually tax slips such as T4’s that belong to your tax return and the verification system can easily compare your filing of these with the copies they have received of the same document. You may be thinking that you could forget about adding one of these forms of income slips to your return. However, the CRA has a copy and they will be quick to bring it to your attention that you failed to include these in your income.
When it comes to small businesses the CRA tends to keep a careful eye of the tax return filings of these entities. They frown upon poor bookkeeping practices and improper financial statements.
Whether you are looking at filing a personal tax return or a business tax return you really should rely on all the help you can get, and this start with the right Toronto tax accountant. It must be remembered that many things that you do financially throughout the year can have a direct impact on your tax return. Thinking that tax time only comes once a year is a bit of a fallacy. Every day is tax time when you really think about it. There are not too many days that go by that we are not paying some type of tax.
If you need assistance with your taxes please fill out the contact form on the right hand side or call me at (416) 398-1700.
