We start the New Year with the annual return of confetti season! You don’t know about it? Amazing!
Every year at this time, we begin the 3 month process of receiving pieces of paper called T-slips – I call them confetti. They come in white, beige, pink, blue, yellow and green. Some have stripes of other colours on them as well. Our Federal Government is one of the largest creators of this annual phenomenon. Charities are another group that create lots of these things and they add myriad colours to the collection.
Slightly tongue-in-cheek of course, however, our entire taxation system revolves around this annual festive period. Usually by the end of January the storm is well underway and continues usually until the end of March with some of the more tardy issuers dragging things out into April – regardless of the fact that most people file early to claim a refund and are now forced to file adjustments and/or send letters pleading for grace to our friends at the CRA.
As someone who prepares a couple of hundred returns of various types each year, I see this first hand and I get phone calls and emails from clients when slips appear late, or even worse after they get a Notice of Assessment that says they hadn’t reported all of their income on T-slips and CRA is applying penalties and interest.
I recommend that most clients wait until at least the 3rd week of March before even thinking about submitting their returns. There are regulatory deadlines established for all companies (and Governments) that issue T-slips are supposed to meet, but this very rarely happens because there are no significant consequences when these deadlines are missed – all to the detriment of taxpayors.
Losing, misplacing or never receiving all of the T-slips happen with great regularity yet even delays not caused by the taxpayor can result in CRA assessing penalties and interest for “failure to report” – and the client is then blacklisted (unofficially of course) for several years by CRA resulting in more audits and wasted time even when the error is caused by the Government failing to issue some slips on time or they have been sent to out-dated addresses.
So what can you do? Here are some pointers to make this easier for everyone:
a) notify Service Canada (by phone) of your correct address – this will catch everything issued by the Government.
b) notify every financial institution, by phone, email or fax of your account numbers and your current correct mailing address.
c) notify all charities to which you have contributed of your correct postal address.
d) notify all of your financial advisors of your correct postal address.
e) if you moved within the past 12 months, contact your local office of Canada Post and place an address forwarding notice on your old address – this should be in effect for at least 12 months to protect you!
f) immediately get a large brown envelope or 3-sided-closed file folder, label it T-SLIPS 2012 and keep it next to where you sort your daily mail. Each time a slip arrives, put it in the envelope or folder right away after noting the issuer, the amount and account number on the outside of the folder or envelope.
g) in the middle of March, compare your list with all of your annual account statements, bank records and your 2011 Tax Return, to see that you have everything and if a slip is missing, phone that issuer immediately!
These tips won’t guarantee everything arrives as it should, but it will reduce panic and errors! Cheers