Why File a Tax Return?
- Monday, 03 May 2010
We have past the peak of the personal income tax season and many taxpayers have not file a return for the current year-- some have never filed. Along with the obligation to file a tax return set out by CRA, Individuals need to be aware of the many benefits in filing.
Am I obligated to file a tax return?
An individual has to file a tax return for 2009 if any of the following applies:
You have to pay tax for 2009
As a sole proprietor you cannot afford to take a chance. If CRA assesses your return they will not give you the deductions you are entitled to. You can save time and money by filing a return.
Revenue Canada has sent you a request to file a tax return. Hurry if you expect to pay and prevent further interest and penalties.
Sale of property
You disposed of or realized a gain in property in 2009 or you are reporting a capital gain reserve you claimed in 2008.
Repayment of benefits
You have to pay back any of your old age security or employment insurance benefits (frequently referred to as claw back.)
Also, if you have not repaid all of the amounts you withdrew from your registered savings plan (RRSP) under the Home Buyers Plan or the Lifelong Learning Plan.
You have to contribute to the Canada Pension Plan (CPP.) This will apply if your total net self-employment income and pensionable income is more than $3,500.
Benefits of filing a tax return
Along with the requirements to file a tax return as set out above, below are a few reasons you may want to file a tax return (There are a few new benefits this year):
Claiming a refund
You want to claim a refund because, of course, you earn more if it’s sitting in your bank account rather than CRA’s (Canada Revenue Agency.)
You want to apply for the GST/HST credit.
To receive family benefits
You or your spouse or common-law partner want to begin or continue receiving Canada Child Tax Benefits payments.
New for 2009-First-Time Home Buyers' Tax Credit (HBTC) http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html - $750 value.
You have incurred a non-capital loss in 2009 that you want to be able to apply in other years. As addressed in the previous issue, non-capital losses can now be carried forward 10 years. You don’t want to miss out on this one.
RRSP contribution limit
You want to report income that you can use to increase your RRSP deduction limit.
For some individuals seeking a loan, the creditor may require previously filed income tax records as part of your financial data submission.
More reasons to file your tax return this year. http://news.ontario.ca/rev/en/2010/04/more-reasons-to-file-a-tax-return-this-year.html
Note: The above list is non-exhaustive. As an individual, there may be other benefits to filing that are not listed above. Please contact your accountant for more information and answers to your specific questions.