Archive for Taxes

If Tax Problems Arise, Turn To A Qualified Tax Firm

A man doing his taxes using a calculator and pencil on a white background

Taxes can be quite complicated and can easily lead a person astray. No one is spared the stress or confusion that comes with filing taxes. There are so many small details that it can be very difficult for a person to try to file their taxes or solve tax problems on their own. Luckily, there are professionals who are trained to do just that. A tax firm is a diverse company employing a wide range of professionals.

There are accountants, tax specialists, as well as lawyers. This is why the bigger tax problems are best solved by firms. Accountants and tax preparers do not have the same access to lawyers that these tax firms do, and this access gives tax firms a unique perspective.

The CRA has a department working very hard at finding people who slip through the tax collection cracks. Over 25 million Canadians file taxes every year, so this is an especially large and complex job. People who don’t pay their taxes and people who earn unreported income are two of the biggest problems they face. Over $35 billion every year is earned and not reported to the CRA. Steep penalties and possibly harsher punishments are waiting for those who avoid compliance with their taxes. There is a silver lining to this, though.

It can be stressful to deal with problems like audits, unreported income, overdue tax debt or being in arrears. The CRA can garnish wages or other income, put a lien your house or other property, or even press criminal charges in extreme cases. But it is never too late to try to set these problems right. Firms are especially handy in these situations because of the lawyers on staff. They can help understand what might happen from a legal point of view.

If filing taxes for a person is difficult, then filing taxes for a business can be a nightmare. There are all of the problems that exist with individual taxes, with additional problems that might arise because of the business aspect. There are several kinds of business taxes that must be paid, including the GST/HST for some businesses. It can be a maze to try to navigate through the tax system – from knowing how to correctly handle payroll and the various different kinds of payroll taxes, to knowing whether certain supplies or services are deductible business expenses. Small businesses, especially, who cannot hire a dedicated accountant but still must abide by the same tax laws as big businesses, can find the help they need from a highly knowledgeable tax firm such as Tax911, which can provide you with all the help you need regarding tax preparation services in Canada (visit their website for more information). In many cases the CRA will waive any penalties and extra fees if a taxpayer makes a voluntary disclosure and steps forward to correct their mistake before the CRA has discovered it.  One of the best ways for dealing with tax problems is to get ahead of the situation, and the best way to do that is to go to a tax firm to devise a plan.

Are You Still Lending The Government Money?

I have been lending the government money for years. I don’t mean through bonds either, I am talking about getting a tax refund every year. I’ve always liked the idea of knowing that I would be getting some extra cash every year from the government. It was a nice feeling! Knowledge is truly powerful if it’s used.

I was listening to Dave Ramsey one afternoon and he was taking to a caller that was getting a few thousand dollars in a tax refund. He then explained how he was actually lending the government money without earning any interest. That hit me like a ton of bricks! I thought how crazy is that to lend the government money and then get excited when they give you back your money without any interest. Who does that! Obviously people who are clueless, which I was. This is why I just had to share this!

If you’re employed with a company and you’re getting a refund. It means they are taking too much money out of your paycheck in taxes, and the government is just giving you back your money because you gave them too much. You may be thinking you contribute to RRSP’s and you donate money to charitable foundations, so that’s why you’re getting a refund. I do both of those things and I still get back more than I should.

There’s a form called T1213 which is a form to request to reduce tax deductions at source. Once you fill out this form, CRA will let you know if your taxes can be reduced at source or not. In my case, I was paying too much in taxes and CRA told me exactly how much I can reduce my taxes. I then sent the letter that CRA sent to me to my HR department and my taxes were reduced immediately.

This form has to be completed every year. I sent my T1213 form to CRA last October to give them enough time to send it back to me. I received the letter from CRA in November and passed it on to my HR department. They were able to process my form in time for January. I am now paying less in taxes! Whoo hoo!

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