By Terry Broaders
Did you receive a T3 or T5 or other T-Slip after you filed your taxes for the year? Don’t just put it away. File that T-Slip with Canada Revenue today by filing a T1-Adjustment or you could face a big penalty. If you forget to include an income T-Slip for 2012 tax year and you have also forgotten to include a T Slip in any of the prior three years you will have a 20% penalty on the amount of income reported on that second “forgotten” slip.
Here is an example. In 2010 tax year you forget to report a $50 T5 slip. No big deal, Canada Revenue picks up on it, reassesses you and charges you about $15 tax on that $50 of income you forgot to report. But you have used up your “strike one”. Now in 2012 tax year you have a $20,000 T5 slip that you forget to include. Canada Revenue will assess you the tax owing on that $20,000 which results in a surprise tax bill of about $6,000 plus interest. But on top of that they will assess you a 20% penalty of the amount of income you failed to report or an extra $4,000. So you pay the $6,000 tax you owe on that $20,000 plus a further $4,000 penalty!
If you a late received T-Slip contact us right away and we can prepare a T1-Adjustment to report it. Once Canada Revenue picks up on it it’s too late ! To avoid the penalty you have to report it before Canada Revenue picks up on it.