Koroll & Company Blog

With the start of the new year, it is important to have a handle on your source deductions for the year.

It is the responsibility of the employer to ensure that accurate source deductions are withheld from employee wages and then remitted to the Canada Revenue Agency (CRA) in a timely manner. This will ensure that employee wages are not over or under-withheld for tax purposes, and that all applicable deductions have been taken into account.

We recently talked about the importance of a mid year financial and tax check up. This included making sure your 2019 tax obligations were up to date and making any necessary adjustments to your return. 

But this time of year is also a good time to take stock of your 2020 tax situation so that you can be prepared come year end.

Most taxpayers are now filing their tax returns online. While this is convenient for taxpayers it means that the Canada Revenue Agency (CRA) doesn’t receive the paperwork to back up the returns being filed. 

For this reason, the CRA conducts post-assessment review to verify the validity of returns, offset risks and catch any mistakes, whether accidental or purposeful.

Most Canadian taxpayers will have filed their 2019 income taxes by now, and likely received the Notice of Assessment which summarizes their tax situation for the year. 

At this point in time, you have made half of your years’ worth of payments toward your income taxes for 2020 through deductions taken at source from each of your paycheques. In addition, you’ll have incurred 6 months’ worth of expenses, some of which will result in tax credits, benefits and deductions that can offset your tax owing come the next tax filing season. 

This year was out of the ordinary when it came to filing taxes. But although taxes did not need to be filed until June 1, many things are still the same. Including what happens once your return is filed. 

After you file your tax return, the Canada Revenue Agency (CRA) will review your return and send you a Notice of Assessment (NOA). 

In most situations, nothing will have changed. The NOA will match what you filed on your tax return. But there are some instances where adjustments will be made. 

Registered Retirement Savings Plan (RRSP) contributions - the one tax planning strategy you have left in your toolbox to ensure you make the most of your 2019 income tax return.

You see, when you contribute to your RRSP, you can reduce your taxable income by the amount of the contributions made, reducing your tax owing. Unlike other tax planning tools, however, contributions made until March of this year can be applied to last year’s tax return (except for those who turned 71, which is discussed below).

To help you make the most of your RRSP contributions, here are some important considerations for the 2019 and 2020 tax years.

It’s that time of year when you should be considering last minute steps to optimize your 2019 income tax return before the April 30, 2020, deadline (June 15 for self-employed individuals).

To help you on your way, Koroll & Company has listed some common tax credits and tips on how to maximize their effect on your tax owing.

Each year, the government adjusts existing tax credits and introduces new ones. These new introductions help taxpayers minimize their tax obligations and decrease the burden of necessary expenses, while also encouraging people (and businesses) to make a difference.

This year, there are four newly introduced tax credits and strategies for individuals and businesses to be aware of: