Read this to know how to avoid CRA Tax Audit for you and your firm. CRA Toronto audit is something that no one wants and to avoid them read this article for you. How you can avoid a CRA tax audit?
CRA or Canada revenue agency has their eyes on each and every one to maintain a fair system of taxation in the country. If they even found something fishy about your firm then you can get a visit by a CRA Toronto for your firm. And this is something which each and every one of you would like to avoid.
5 tips to avoid a CRA tax audit go worse?
Suspicious tax return changes: Consistency in your tax return is something that is closely monitored by CRA. And if you are a business owner or self-employed then any kind of suspicious change in income will ring an alarm and you can be audited by a CRA.
The CRA looks for consistency in your tax returns from year to year, especially if you file as self-employed or a small business owner. If you have massive changes in deductions or income, the CRA may flag your return for a review. Make sure that you can clearly document and support all changes.
Maintaining the records: Maintain all your records of previous taxes, and everything which you think will come handful when you can face such taxes. This will help you to out a positive impression as you can show your proofs to the auditor.
Hiding Cash Income: Reporting all your income whether cash or trade, whatever money you get in exchange for your service should be returned and that’s exactly what the CRA wants from you. Thus if you will hide your cash income and file taxes against them then the probability of CRA Toronto knocking your door will increase. Always file your tax return properly as the CRA can even get to know about you from the place you live. Example: If you live in a posh society but you are filing your taxes less than others then it can raise their eyebrows.
Hiring an accountant: Filling a tax return is very important and who’s better than choosing yourself a professional Toronto accountant for you. These people know the law and will be able to file
Repetitive Rental Losses: In some years, your rental property may suffer a loss. However, if you claim repeated losses, the CRA may get suspicious. Avoid this risk by only declaring rental income if you are trying to make a profit. Your taxes without any mistakes.
The following are only some ways through which you can avoid a CRA tax audit for you. RC Financial Group is always there to handle your taxes and protect you from possible audits, thus hire us for getting the best accountant service.
Suggestion for handling a CRA audit
For are some points which can help you in a CRA Tax Audit, read it carefully
What you should do: In a Toronto tax audit, you must convince the CRA that you reported all of your income and were entitled to any credits, deductions, and exemptions that are questioned.
Delay when possible: Postponing the audit usually works to your advantage. Request more time whenever you need it to get your records in order, or for any other reason.
Prepare your records: If you are missing receipts or other documents, you are allowed to reconstruct records.
Manage your expectations: Don’t expect to come out of the audit without owing something — the odds are against you. Don’t try to compromise on the amount of taxes to be paid; instead, negotiate the tax issues with the auditor.
Don’t answer unless asked: Give the CRA Toronto auditor no more information than they are needed to, and don’t talk any more during the audit than is absolutely necessary.
Can CRA look at your bank account?
The CRA Toronto has there access to info from all Canadian financial institutions. They can also determine if you’ve exceeded your TFSA and RRSP contributions and penalize you accordingly.
Getting yourself a CRA audit tax help is the best option for you to handle any kind of audit which can degrade your firm reputation and image.