Life events that are important to share with your Accountant and CRA
A lot can happen in a year. Some changes in your life may have tax benefits or tax consequences. Below is a list of common life events that you should communicate to your Accountant and CRA:
Marital Status Change
Your marital status, and at what point during the year it changed, can directly affect your tax return and eligibility for certain benefits and credits.
New Baby
Starting a family is a beautiful thing, but can also be very expensive. You are going to want to make sure you are claiming the benefits and credits you may be eligible for as a new parent.
Acting Caregiver
Do you have an elderly parent or grandparent that has recently moved in with you? Are you caring for a loved one with a disability that is unable to care for themselves? There are benefits and credits available to you that you could be claiming.
Health Changes
If you or a dependent have had health changes during the year, this may mean you could claim some additional medical expenses. Discussing this with your Accountant will allow you to discover claims you may not have known were possible. If you have recently become disabled, there is a non-refundable Disability Tax Credit that can be claimed. You must receive approval from the CRA regarding your eligibility for the Disability Tax Credit before making a claim for the credit on your tax return. We can provide you with the form.
Sale of a Property or Principal Residence
If you sold a cottage or an investment property, it is important to communicate this to your Accountant as you are required to report this transaction on your personal income tax return and pay tax on the capital gains from the sale (if applicable). There are tax planning strategies your Accountant can assist you with to ensure you take advantage of any potential tax saving opportunities.
Although you are not taxed on the capital gains from the sale of your principal residence, you are required to report the sale of your principal residence on your personal income tax return. This has been a requirement since filing the 2016 tax year. The designation of “principal residence” years can be assigned to your house or your cottage, depending on whether the property meets set criteria. While there are no tax consequences to the sale of the property you may fully designate as your principal residence, the CRA now requires that we provide basic information regarding the sale in order to take advantage of the full principal residence exemption.
Foreign Investments
If you own foreign investments/properties with a combined cost amount of $100,000 CAD, at any time in the year, that are not held primarily for personal use and enjoyment, you most likely have a reporting responsibility to CRA and should file Form T1135 – Foreign Income Verification Statement (can occur if exercise stock options in the year). Significant penalties apply for failing to file Form T1135 by the reporting deadline and for making a false statement or omission about the required information.
We can assist you with all your personal tax needs. Be sure to contact Ritchie Shortt & Tully LLP if you have any questions or would like our assistance!
