You screwed up your taxes, now what?

For many of us, we had until April 30th to file our taxes, by now you should have received your notice of assesment from CRA... did you receive a surprise letter??

Over the weekend I came accross this great article from Tim Cesnick.

You screwed up your taxes, now what?

Taxes can be intimidating for some people. Don’t let your tax return scare you. Think of this tax filing exercise as an open-book test. Did you ever write one of those? They gave you the book, for crying out loud. The answers are right in front of you. And to be truthful, filing your tax return is even better than an open-book test because there isn’t always one right answer, and you’re allowed to choose the answer that gives you the best mark – that is, the lowest tax bill – as long as you’re not lying when you complete the forms.

Finally, unlike any test I’ve ever written, you can go back and change your answers after the fact if you discover you made a mistake or forgot something. And if you disagree with the grade you receive, you can often have it changed by a simple phone call or formal objection.

Today I want to talk about what to do after you’ve filed your tax return and discover you’ve forgotten something, made a mistake or disagree with the assessment the taxman sends you.

Making changes
Picture this: You send in your tax return thinking that all is well and then discover after the fact that another T-slip arrives in the mail a few days later. Or perhaps you’re going through your files from last year’s tax return and discover some receipts that should have been kept in this year’s file – so they were missed when you prepared this year’s return (you did check last year’s file, didn’t you?).

Could it be that you didn’t forget anything, but simply made a mistake? Common mistakes include failing to transfer certain tax credits to a family member to save more tax (age, disability, pension, tuition, education, textbook, public transit and donation tax credits come to mind), forgetting some types of business expenses (did you claim capital cost allowance on your computer, desk or owned vehicles used in business?), forgetting safety deposit box fees, among other mistakes.

If you did forget something, or made a mistake, you can easily make a change by filing Form T1-ADJ (called an “adjustment request”). It’s a one-page form where you simply make note of the lines on your tax return you’d like to change, provide an explanation at the bottom, and send it in. No need to file a complete amended tax return. You’ll find a copy of Form T1-ADJ on the Canada Revenue Agency’s (CRA’s) website at cra.gc.ca.

Today I want to talk about what to do after you’ve filed your tax return and discover you’ve forgotten something, made a mistake or disagree with the assessment the taxman sends you.

Making changes

Picture this: You send in your tax return thinking that all is well and then discover after the fact that another T-slip arrives in the mail a few days later. Or perhaps you’re going through your files from last year’s tax return and discover some receipts that should have been kept in this year’s file – so they were missed when you prepared this year’s return (you did check last year’s file, didn’t you?).

Could it be that you didn’t forget anything, but simply made a mistake? Common mistakes include failing to transfer certain tax credits to a family member to save more tax (age, disability, pension, tuition, education, textbook, public transit and donation tax credits come to mind), forgetting some types of business expenses (did you claim capital cost allowance on your computer, desk or owned vehicles used in business?), forgetting safety deposit box fees, among other mistakes.

If you did forget something, or made a mistake, you can easily make a change by filing Form T1-ADJ (called an “adjustment request”). It’s a one-page form where you simply make note of the lines on your tax return you’d like to change, provide an explanation at the bottom, and send it in. No need to file a complete amended tax return. You’ll find a copy of Form T1-ADJ on the Canada Revenue Agency’s (CRA’s) website at cra.gc.ca.

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As usual, its wise to consult a professional before undertaking any appeal. For any questions, please do not hesitate to contact me at hugues.boisvert@andrewsrobichaud.com