With RRSP season now officially behind us and the federal budget out the door, it is that time of year to focus on preparing your 2009 tax return.
Truth be told, unless you're expecting a significant tax refund, there is no real rush to file your return early. The April 30 deadline is still eight weeks away. In fact, taxpayers who owe significant sums of tax for 2009 may wish to wait until the last minute to file and pay any balance owing to avoid parting ways with their cash too early.
In some cases, waiting until all your slips have come in will negate having to file adjustments to your return at a later time. Most tax slips, such as T4s and T5s, have a Feb. 28 issuance deadline, meaning that they should be in your hands by now.
While there are no specific rules in the Income Tax Act requiring charities to issue official donation receipts within a particular time frame, the Canada Revenue Agency does suggest that they also be issued by the end of February following the year during which the donation was made. Be sure to follow up with any charities you donated to in 2009 if you still haven't received those receipts.
Perhaps the only slips you are still waiting for are from mutual funds structured as trusts, which have 90 days from their year end to issue T3 slips reporting any income or capital gains distributions you may have received in 2009.
Since most mutual fund trusts have either a Dec. 15 or Dec. 31 year end, you should have all of your non-registered mutual fund T3 slips by the end of the month.
Finally, keep in mind that it's still your responsibility to report all your income even if you don't end up receiving all your slips.
This was the harsh lesson learned in January by Satish Sabharwal, who wound up in Tax Court objecting to taxes owing of more than $5,000, plus arrears interest of about $425, and a late-filing penalty of $245 in respect of his 2003 tax return.
Mr. Sabharwal argued that he never received a T-slip for some of his 2003 income paid to him by Great West Life from a wage-loss replacement plan. The CRA had a copy of the T4A slip issued to him and reassessed him accordingly.
At trial, Mr. Sabharwal acknowledged that he had, in fact, received this income.
The judge, who upheld the taxes, interest and penalty charged, advised Mr. Sabharwal that "the requirement to pay tax on a particular item of income is triggered by the receipt of the income and not the receipt of a T-slip."