Take the Time to Do Your Taxes Right or Pay the Consequences
CIBC offers expert tax tips and reminders to help Canadians avoid penalties and interest charges this tax season
TORONTO, March 20, 2014 /CNW/ - CIBC (TSX: CM) (NYSE: CM) - As Canadians prepare to file their 2013 tax returns this spring, a little attention up front can go a long way to saving time, money and undue complications down the road, says Jamie Golombek, Managing Director, Tax and Estate Planning at CIBC.
Canadians had to pay over $1 billion in additional taxes in fiscal 2012 alone, primarily because what they reported on their tax returns didn't match the dollar amounts provided by employers, financial institutions and other sources, according to the most recent data from the Canada Revenue Agency (CRA). As well, CRA rejected almost one in every five tax credit and deduction claims the previous fiscal year.
"Each year, the CRA identifies costly, common errors in personal tax returns that can easily be avoided if you take the time to do it right and seek advice if your situation is complicated," says Mr. Golombek. "If you under-report income or if deductions are disallowed, taxpayers may find that they unexpectedly owe more money to the CRA."
In addition to collecting additional taxes from you, the CRA will charge interest, currently at a rate of 5 per cent, on any overdue tax amounts, he points out. And, if you fail to file your return by the deadline or under-report income repeatedly, penalties may also apply, he adds.
"To avoid potential interest and penalties, it's important to take note of key deadlines, ensure that you report all of your income accurately and verify that you are eligible for tax credits or deductions before you claim them," says Mr. Golombek.
In his latest report, Doing It Right the First Time! Avoiding the Most Common Tax Return Errors, Mr. Golombek provides a number of tips to help Canadians avoid costly errors on this year's return:
- Double-check that you've included all income from all sources;
- Compare information on tax slips to investment statements or other supporting documents to ensure accuracy;
- If you're missing information, do your best to get it; estimate amounts when information doesn't arrive in time to file;
- Report all RRSP contributions, even if you're going to claim the deduction in a later year;
- Determine if you are eligible for a deduction or credit before you claim it;
- Make sure your current address is on file with employers, financial institutions and the CRA so that you receive all tax slips and correspondence;
- Be punctual - file your return by the deadline, which is April 30, 2014 for most taxpayers, and respond to any direct CRA correspondence within the required timeframe.
To learn more about reporting information from tax slips, RRSP and other deductions, foreign tax credits and CRA correspondence and timelines, read Mr. Golombek's 2014 tax report, Doing It Right the First Time! Avoiding the Most Common Tax Return Errors.
To view Mr. Golombek's other tax planning reports, please visit: www.cibc.com/ca/advice-centre.
CIBC is a leading North American financial institution with nearly 11 million personal banking and business clients. CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada, and has offices in the United States and around the world. You can find other news releases and information about CIBC in our Press Centre on our corporate website at www.cibc.com.
SOURCE Canadian Imperial Bank of CommerceFor further information:
Caroline Van Hasselt, Director, External Communications and Media Relations, at 416-784-6699 or email: firstname.lastname@example.org.