Accounting and Taxes Thread

[Locke]

Originally Posted by calf

Just to close the loop on this, after talking to another buddy who does a lot of personal taxes as well, he said 'oh yeah, this is happening lots...good luck and if you succeed, let me know how you did it". So, with the penalties/interest not being overly huge, we decided not to waste our time and just pay the tax, interest and penalties for 2022/2023. Refiled and immediately paid 2024 taxes to avoid it getting caught/hit with further penalties, but they charged a whopping $12 in interest for our troubles. The lesson being - have the seniors in your life check all their online accounts that have any sort of money, etc, in case they send tax slips there instead of by mail!

I'm going to throw some cold water on this, sorry, you still have to be very careful!

The lesson being on 'when' you check their online accounts. In my experience the taxpayer may not have a paper slip and the information also may not be posted on their online accounts when you're doing the taxes.

A lot of that stuff gets posted late.

[Locke]

With Thanksgiving around the corner, Prime Minister Mark Carney is hoping new affordability measures announced Friday will have Canadians feeling a little extra thankful heading into the holiday weekend.

During a press conference in his Ottawa riding the Prime Minister made a trio of cost saving announcements, headlined by a campaign promise to make tax filing easier for some Canadians. That will include automatic tax filing for eligible people.

Beginning in the 2026 tax year up to 5.5 million low-income Canadians will see the Canada Revenue Agency automatically file their taxes. The measure will ensure people are receiving government benefit they are eligible for, including the GST/HST credit, Canada Disability Benefit, Canada Child Benefit and more Canadians may not be aware of.

Terrazzano also questions why the government is giving the Canada Revenue Agency (CRA) more power over taxpayers when it comes to filing.

“The CRA acting as both the tax filer and the tax collector is a serious conflict of interest,” Terrazzano says. “Trusting the tax man to do your tax return is like trusting your dog to protect your burger.”

https://www.ctvnews.ca/atlantic/new-...xed-reactions/

Fundamentally, I understand the reasoning for this and I think at it's core its a good idea but thats not to say that I endorse it.

I think its going to cause more problems than its going to solve, for a variety of reasons.

First of all, I hope its not limited by income. For instance, if you're just an office worker who lives alone and has a T4 and 2 RRSPs then yeah, CRA should be able to pound that out for you regardless of your income.

But again...I've seen multiple instances of people not getting their RRSP slips or not getting them on time. When is CRA is going to do the return? Are they going to double-check your address and banking information? What if you have medical expenses or donations?

You know what low-income people tend to have? Medical expenses.

Then...even if it is the super simple, basic as all hell Tax Return, low-income, nothing to declare, etc. that often makes you a dependent. Are they going to transfer that credit? To whom? Based on what? When?

I could give examples, hell, I'm working on one now. The client is on AISH, has a DTC, lives at home and transfers that DTC to her parents. The parents call me up saying:

"Hey...we didn't get the money for the transfer of the DTC credit, whats up?"

Well. Her taxes were simple so she did them herself for free over the phone and didn't transfer the DTC. So...no money. Now I have to fix it which will cost you more than if I'd just done it properly in the first place.

What is CRA going to do in a scenario like that? Expect me to fix it? So these taxpayers are paying an accountant anyways?

Moving along from that, I could go on all day on scenarios.

At the moment CRA are unqualified and incapable of PICKING UP A PHONE.

And you want to trust these people with your taxes? If they screw something up what is your recourse? Phone them? Good luck with that.

Not to mention the normal failings and pitfalls of any pilot project but magnified because its an Agency that is already excelling at incompetence and cant fix the problems they currently have, but sure, lets add some more.

They can whine more about getting more staff. More staff who dont seemingly actually do anything.

I'll think more on it as more details come out but as it stands at the moment, I think the CRA are incompetent and wouldnt let them near a tax return.

For some people I can see this being a really good idea in principle I just see it falling flat on its face in execution. CRA screw up on the most basic of things as it is, misreading slips, duplicating slips, getting box numbers or years wrong, I've seen every kind of dumbass mistake you can imagine. And then what is the taxpayer supposed to do?

Try calling them up and saying "Hey! Deep Blue over there got my taxes wrong, fix it!" ?

Further, I have a lot of clients, I could see this helping...maybe a dozen of them? I could see this screwing up more returns than that. Thats not really a great result.

[mrkajz44]

I'll disagree here - I think it's a huge step in the right direction and will be largely positive. Yes, it will be worse for some people with more unique situations, but I believe the vast majority will end up better off which is what you are trying to achieve this programs like this. I hope this is a gateway to have automatic filings for most (all?) Canadians, where you need only "file" if you need to deviate from what the automatic filing would do.

[RandyHolt]

Originally Posted by mrkajz44

I'll disagree here - I think it's a huge step in the right direction and will be largely positive. Yes, it will be worse for some people with more unique situations, but I believe the vast majority will end up better off which is what you are trying to achieve this programs like this. I hope this is a gateway to have automatic filings for most (all?) Canadians, where you need only "file" if you need to deviate from what the automatic filing would do.

I think this is a step in the right direction too, but the number they are saying scares me. There is no possible way they are going to get 5.5 million tax returns correct. If there are about 35 million taxpayers, that means they're going to file 15% of the returns without considering childcare deductions, disability or tuition transfers, donations, and all the other slips they don't get a copy of.

If they said they were going to start with 2 million or so low income tax payers that have yet to file previous years, I think that would be a great start. I haven't read too much into it yet, but hopefully it's some sort of opt in system and they don't just go filing the returns.

Setting up a system where you can file directly with CRA and they will populate the data they have, and you just enter your additional information and deductions would be infinitely better.

[fotze2]

This means I don't have to have a complimentary scotch while looking at Swords at lockes office whilst talking about which posters are dicks.

[Shazam]

Most people's tax returns are utterly conventional.

[Fuzz]

Originally Posted by RandyHolt

I think this is a step in the right direction too, but the number they are saying scares me. There is no possible way they are going to get 5.5 million tax returns correct. If there are about 35 million taxpayers, that means they're going to file 15% of the returns without considering childcare deductions, disability or tuition transfers, donations, and all the other slips they don't get a copy of.

If they said they were going to start with 2 million or so low income tax payers that have yet to file previous years, I think that would be a great start. I haven't read too much into it yet, but hopefully it's some sort of opt in system and they don't just go filing the returns.

Setting up a system where you can file directly with CRA and they will populate the data they have, and you just enter your additional information and deductions would be infinitely better.

Good news!

Transitioning to Automated Federal Benefits

Filing an income tax return is the gateway for many Canadians to access important financial benefits—like the GST/HST Credit, the Canada Child Benefit, the Canada Disability Benefit, and more —which can help them manage their day-to-day costs. That's why the Canada Revenue Agency (CRA) will make it easier for Canadians to file a tax return and access key benefits by:

• Preparing a pre-filled tax return in CRA's My Account online filing system for about 1 million lower-income individuals with simple tax situations, starting for the 2026 tax year—scaling up to about 5.5 million individuals for the 2028 tax year; and
• Continuing to add new information to its secure Auto-fill my return digital service that helps individuals using certified commercial tax software fill parts of their tax return.

https://www.canada.ca/en/department-...get-ahead.html

[RandyHolt]

Originally Posted by Fuzz

Good news!



https://www.canada.ca/en/department-...get-ahead.html

The problem is just going to be a lot of the people who need this won't have access to my account so they're going to file the returns without telling those people presumably.

If it's just for delinquent, low income taxpayers or if you get to opt in then I'll admit this is a great first step towards automating tax filing.

[Fuzz]

For the most part these people are all going to be receiving benefits, not paying. So I don't really see the negative. And I'd hope it's setup so you can easily amend it if needed. But I suspect most won't, and will be happy with the free money.


I struggle to see how this is a bad thing.

[bizaro86]

Originally Posted by Fuzz

For the most part these people are all going to be receiving benefits, not paying. So I don't really see the negative. And I'd hope it's setup so you can easily amend it if needed. But I suspect most won't, and will be happy with the free money.


I struggle to see how this is a bad thing.

It's probably a net benefit for most people, but some people are going to end up really screwed.

Because it'll be the person with a lower-income job that gets a tax refund in the mail they weren't expecting and spends it, only to find out the government missed their gig work income or the trust income from their grandma's estate or whatever, and now they owe the refund back, plus they owe back some of their child benefit money, and probably interest as well. And when they can't pay it back (because they spent the money already) there will be penalties.

This is a great idea if it were to be competently implemented. But there's no evidence that the CRA will be able to do so.

[Slava]

Originally Posted by bizaro86

It's probably a net benefit for most people, but some people are going to end up really screwed.

Because it'll be the person with a lower-income job that gets a tax refund in the mail they weren't expecting and spends it, only to find out the government missed their gig work income or the trust income from their grandma's estate or whatever, and now they owe the refund back, plus they owe back some of their child benefit money, and probably interest as well. And when they can't pay it back (because they spent the money already) there will be penalties.

This is a great idea if it were to be competently implemented. But there's no evidence that the CRA will be able to do so.

Sure and the competence of CRA is a question. At the same time, there are plenty of examples where this kind of thing has been implemented and it works fine. I think something like 90% of returns could be handled this way and there's no good argument for why they shouldn't be.

[RandyHolt]

I think anyone who has ever tried to fix something even the least bit complicated with CRA sees how this is going to turn into a nightmare. You can spend literally 12-18 months of back and forth with CRA to fix certain items such as disability transfers or spousal support.

It works in some places, but presumably with a more simplified tax code (which I am a strong advocate for). With our tax code and what the government actually receives reporting on, this would not apply to anywhere close to 90% of people.

The government gets no reporting on childcare expenses, employment expenses, rental income and expenses, side gigs or self-employed income, donations, medical expenses and student loan interest among other things. It also does not get updates on relationships so the child benefit people receive will be completely clawed back when they update to common-law or married the household income goes up.

Implemented correctly this can be a good thing. The CRA is currently not able to implement this in a positive way aside from a small portion of people who will otherwise not file a return.

[Mccree]

Would it not work by answering a few questions? Change in relationship statue, rental income etc.... if you answer the questions correct bam CRA files the return, answer incorrectly CRA doesn't? That is how I envision it being implemented.

[Locke]

Originally Posted by Mccree

Would it not work by answering a few questions? Change in relationship statue, rental income etc.... if you answer the questions correct bam CRA files the return, answer incorrectly CRA doesn't? That is how I envision it being implemented.

I guess I'm just more than a little jaded with CRA, but of all of my clients I'd say...maybe half of them have their CRA Online account? But low-income and elderly clients, which this program is being designed for?

Most of them dont even have computers and of the ones that do, they dont know how to use them let alone have their CRA accounts set up.

This is probably a generation too soon.

Its a good idea! Simple Tax Returns should be essentially automatic, but like Elon's promise of Full Self-Driving Cars from over a decade ago...I dont think we're there yet.

[Locke]

Originally Posted by fotze2

This means I don't have to have a complimentary scotch while looking at Swords at lockes office whilst talking about which posters are dicks.

The scotch is always here. As are the swords. You should see some of my new ones!

[fotze2]

Originally Posted by Locke

The scotch is always here. As are the swords. You should see some of my new ones!

I've seen the only one that matters.

[Locke]

Originally Posted by fotze2

I've seen the only one that matters.

I saw you eyeing my Katana...that is off-limits!

[Shazam]

Are you allowed to cross swords?

[Locke]

Originally Posted by Shazam

Are you allowed to cross swords?

There is no casual sword-play allowed in my office. This is a family establishment.

[fotze2]

I’m more of a dagger guy.