Tax Chapter 2 Flashcards
What information must be provided to identify the taxpayer?
Social insurance number, Name, Date of Birth.
Mailing Address, (this is used by CRA to mail notice of assignments and refund cheques if the taxpayer does not use direct deposit)
Email Address (To indicate that the taxpayer prefer receiving the electronic notification from CRA instead of paper complete part E on the T183)
Residency ( the taxpayer’s province of residence on the last day of the taxation year determines which province the taxpayer pays Income tax to and which provincial credits they may claim.)
For self-employed taxpayers, this residency is based both on their personal province as well as the business address. If the taxpayer business is in their province if residence, both their business income and their non-business income will be taxed to the province of residence.
Marital status
Spouse identification ( Enter this information if the taxpayer status was married or common low on December 31st. The taxpayer spouse’s name and social insurance number are used to identify the spouse so that the claim and transfer are verified.) If the taxpayer spouse is self employed then the due date for both spouses are in june 30th however any taxes owing would still be payable by April 30th to avoid interest.
Death of Death
Election Canada questions(with the taxpayer permission CRA will provide the taxpayer name address and date if birth to election Canadaa)
Indian Act -Exempt income (taxpayer who who receive income that is exempt under the indian act must Indicate they have that income and complete form T90 income exempt under the indian act to report the amount if that income.)
Foreign Asset Reporting( taxpayers who holds foreign assets who total cost exceeds $100.000 are required to report the details of these assets. Click yes in the box to this question and complete form T1135. This form will be filed electronically separately from the T1.)
Climate action incentive payment. (most provinces taxpayer who live outside a census metropolitan area will need to tick the box in this section to receive the 10% rural supplement.
How many paper return may be filed without penalty by a taxpayer?
10 papers for individuals, estates or trusts or corporations
Under pending legislation this amount is reduced to 5
If a professional files a return , who receives the notice of assessment ?
What information must be provided to identify the taxpayer spouse?
What are the most common documents for income ?
How is income reported when an information slip is unavailable ?
What are the most common deduction available to investors?
What are the common source documents for deductions?
Line 10100 Employment (T4)
Line 10400 Other Employment (T4)(w2 or other slips
Line 11300 Old Age Security (T4A(OAS)
Line 11400 CPP/QPP Benefits(T4A(p)
Line 11500 Pension Income(T3, T4A, T4RIF, T5, T4RSP(including spousal) Foreign pension documentation will depend on the country of origin.
Line 11600 Elected split Pension Amount( File T1032.A signature is required by both spouses.
Line 11900 EI (T4E)
Line 12000 Dividends (T3, T5, self-reported if less than $50.
Line 12100 interest and other investment (T3, T5, self reported, Us income may be on the 1099 form.
Line 12500 RDSP income (T4A)
Line 12600 Rental (complete T776-usually self reported taxpayers should have receipts for expenses claimed. Sometimes T5013 if earned by a limited partnership.
Line 12700 Capital Gains (T3, T5 for individual assets buy or sale slips or documents of purchase or sale. Sometimes T5008 or annual capital gains summery from the fund company.
Line 12800 support payment(court order /written agreement plus proof of payment)
Line 12900 RRSP income(T4RSP)
Line 13000 Other income (T3, T4, T4A, RCA, T4RIF, T5013
Line 13500,13700,13900,14100,14300
Self-employment income( taxpayer should have record of each incomes and expense amount including capital purchase and depositions.
Line 14400 WCB (T5007)
Line 14500 social Assistant (T5007)
Line 14600 (Suppliments) (T4A(OAS)
Who should claim the family medical expenses?
The spouse with the lower net income unless their other credit already exceed their income.
In some cases, a claim for medical expenses may result in no credit but should be made nonetheless if the taxpayer is eligible to claim the refundable medical expense supplement(a refundable tax credit)
For medical expenses of other dependents, the claim is reduced by the dependent net income so the claim by either spouse as long as their income exceed their other non refundible credits.
What are the common source documents for credits?
What is audit proofing?
Make sure you have all the source documents needed for all of your claims. And also rechecking to make sure everything is accurate before sending your documents.
Do you claim an income office under the simplified or detailed method?
Who claims.. the
Who claims the charitable tax credit?
The value of the credit is the same no matter which spouse makes the claim. However if the individual other non-refundable credit exceed there income there is no benefit to making an additional claim
In this situation any non refundible credit that may be claimed by the higher-income spouse should be claimed by that spouse.
If you find errors you can file an adjustment to correct them the paper form is called?
T1-ADJ. You can also use the Represent a client portal on the CRA website
