Getting Ready for Tax Time

The deadline for filing your 2017 personal income tax return is April 30, 2018 or June 15, 2018 if you are self-employed. Organizing your tax information prior to submitting it to your tax preparer or before you begin to complete the return yourself reduces the risk of missing some pertinent information.

If necessary, update your name, address, marital status, changes in dependents and Province of residency. 

Other information required to be reported includes a declaration of whether or not you have foreign property (including cash, land, or investments) with a cost base exceeding $100,000.  If so, you must complete form T1139 that reports the foreign property you own and the income earned on that foreign property.

2017 is the second year since the requirement to report the disposition of your principal residence was introduced. In the year in which you dispose of your principal residence you must report the year of purchase, the proceeds received and the address of the property. The sale of your principal residence does not result in a tax liability if the property was your principal residence for each year you owned the property. 

You should provide your prior year notice of assessment or reassessments for review.

BASIC INFORMATION SLIPS

Gather your income tax information slips together and compare them to last year to ensure that none are missing. This should include any of the following:

  • T4’s:  all employers must deliver them by February 28.
  • T3 and T5 statements of income from trusts and investments, also to be delivered by Feb. 28
  • T4A (OAS) and T4A (P) statements of old age security and Canadian pension
  • T4E employment insurance benefits
  • T5007 social assistance slips
  • T4A other income (pension, annuity, commissions)
  • RC62 statement of child care benefits received
  • T5008 trading summary slip reporting investment dispositions
  • T4RSP withdrawals from RRSP plans during the year
  • Information and receipts re alimony/separation to be claimed

Certain allowable deductions or tax credits should also be included:

-      T2202 education and textbook amounts for students (TL11A re schools outside Canada)                            
-      Union and professional dues                                                                                                                                           
-      RRSP contribution slips (review to ensure you have slips for Jan/Feb 2018
-      Donation receipts.
-      Medical expenses. Group and summarize these by categories such as prescriptions, dental, optometric, chiropractic, massage. Note that Pharmacies can provide a yearly statement of prescriptions filled. Travel costs for medical purposes are eligible for trips over 40 km from home and can include hotel, meals and vehicle costs. Travel Information should include date, location, medical person/facility and purpose.                                
-    Child care expenses and BC fitness receipts grouped and summarized.                                                                      
-    T2201 disability certificate for those with an infirmity confirmed by a doctor
-    Moving expenses for a move during the year can be deducted. Refer to form T1M for the information required and deductions available or discuss with your tax preparer.

Self Employed
Persons with income from self- employment or professional services must report their income, expenses, and net income for tax purposes on schedule T2125.

The types and amounts of income should be summarized.

Refer to the descriptions on the above form and summarize the various types of allowable expenses. The purchase or sale of capital equipment should be included so that capital cost allowance may be accurately calculated. A mileage log should be maintained for business use of vehicles but you must at least provide the number of kilometres travelled for business use and the total number travelled in the year.

If your business is operated from your place of residence, you may be able to deduct certain costs. You should include a figure for the square footage of the home used for business purposes and the total square footage of the home.

If you have a complete summary of your income and expenses, it is not necessary to provide all the receipts as CRA does not require them to be provided at the time of filing. You should be aware that CRA may do a follow up or subsequent review of your tax claim and request documentation. For expenses to be deductible, receipts must be available and should be maintained in case CRA requests to see them.

Rental Income
Rental income is reported on form T776 and reference should be made to this form for the various deductions available. Incomes and expenses should be summarized by category separately for each property rented.

The above information is meant to be a general outline and may not fully address all items which may affect your tax position. For more information please consult with your professional tax advisor.