Tax Season Prep 101

Quick Tips & Reminders

Deadlines

Although it may seem simple, there are a few dates for tax season thrown around and it can become confusing.

Here’s what you need to know:

  • Most individual taxpayers' filing deadline is April 30.
  • Any taxes owing for the year are also due by April 30.
  • Individuals with self-employment income (and their spouses) have an extended deadline to file their returns until June 15.
     
    • DON’T FORGET: although filing deadline is June 15, taxes owing for the year are still due April 30!
    • DON’T FORGET: rental income does not qualify as ‘self-employed.’

deadline

 

 

 

 

 

 

 

Other potential reporting requirements

  • T1135 – Foreign Income Verification Statement
    • Canadian resident individuals, corporations and certain trusts that, at any time during the year, own specified foreign property costing more than $100,000 MUST file a T1135. Filing of T1135 is for information purposes and gives rise to no additional tax. Failure to file, or late filing of T1135 forms can cause significant penalties to be levied.
    • Most commonly, specified foreign property includes:
      • Funds situated, deposited or held outside Canada
      • Tangible property situated outside Canada
      • Shares of non-resident corporations
      • Other more obscure items (ask us if you’re unsure)
    • The deadline to file this form is the same date which your return is due (eg, self-employed individual would file T1135 prior to June 15).
  • US reporting requirements
    • Although you may have been told that staying less than 183 days in the US will keep you onside, it is a little more complicated than that. A substantial presence test must also be considered, which provides a weighted average of the last three years.
      The calculation is as follows. 
      • Number of days in the current tax year [2019]
      • ADD (number of days in the previous tax year ÷ 3) [2018]
      • ADD (number of days in the second previous tax year ÷ 6) [2017]
      • If this calculation ends up over 183, you will be considered a US resident for tax purposes and you may require a US tax return
    • If you are caught under the substantial presence test, you may still be able to file a lesser form (8840) which takes advantage of the ‘Closer Connection Exemption.’
    • If you spend a significant amount of time in the US, you should ask us what your filing responsibilities are – we can help make sure you are well informed and onside.

 

As always, the best practice is to ask questions before taking action!

Contact us any time you have questions and we will be happy to advise.