If the mere thought of getting an email for the Notice of Assessment breaks you out in a sweat, then you have landed at the right place. In this post, we will discuss everything about CRA tax audits and the top tips recommended by the best tax accountant in Montreal to avoid these audits.
What is CRA Tax Audit?
In the layman language, CRA tax audit is a word similar to a headache for Canadian taxpayers. CRA is the abbreviation for Canada Revenue Agency, and notification for CRA tax audit means the tax agency is choosing you for an audit. The agencies audit people with suspicious tax returns, and most likely, the taxpayers selected for the inspection are small businesses and self-employed individuals.
What happens during a CRA Tax Audit?
A discrepancy in the tax returns could lead to audits. At first, the CRA will request information. Suspicious responses to the request might lead to an audit. During the audit, every document related to the business records, such as payroll, invoices, and ledgers are examined. Cooperating with the auditors and keeping all the records ready for the audit is the best advice. How to reduce the chances of CRA Tax Audit?
Every year more than 30000 taxpayers receive the notice of assessment. If you want to steer clear of the red flags that trigger CRA tax audit, it is always a good idea to get timely consultations from a reliable tax accountant in Montreal.
Besides, you can follow the below mentioned tips:
1.Ensure to double-check everything and conduct your own audit every time you file a tax return.
2.Don’t miss out on any income. Ensure to fill out about everything, including interest and dividends.
3.Practice diligence while reporting losses. If you have a small business and reporting losses regularly for two-three years, even if there was the slightest profit, you might get a notification for audit.
4.Be consistent with filling your tax return. Make sure you get help from an expert and do it regularly to avoid any discrepancy.
5.Some people go overboard with their tax filing and attempt to cheat the agencies. It indeed is the absolute way you are bearing a red flag for the CRA. Always be honest and mindful while filling the returns.
Final Word
CRA tax audit is a dreadful feeling for many taxpayers. Considering the complex taxation system in the country, it is indeed an overwhelming task to get everything right all the time. Thus, it is advised to get expert guidance every time you file a return. If interested, get complete guidance on tax audits and tax planning from Tohme Accounting which is synonymous to the most trusted tax accountant in Montreal.
Tony Hawlker is the author of this article.To know more about Tax Accountant Montreal please stay with our website:tohme-accounting.com
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