haggis88

Hi all...

I won't bore you with the details, but I got my T4 today and put all the numbers into StudioTax, checked and double checked I have everything right...

It says I owe more than $2000 in underpaid taxes for 2013...which seems like an awful lot, considering I got almost that as a refund last year and I only worked for 4 months in 2012...

Do i have another form to come with other numbers on it? Or has someone messed up somewhere?

ann m

Do you remember completing the TD1 and/or TD1A forms for the 2013 year? Did your payroll department apply some kind of flat rate tax because they were not working off the forms?

Can't think of anything else right now - but $2,000 out sounds a lot to find. Ouch! If nothing else, make sure they are deducting the right amounts for the 2014 year.

Novocastrian

I'm afraid that if you don't bore us with the details you won't get any help.

When did you arrive in Canada?

Edit: Sorry on rereading you arrived in about August 2012. Did you remember to put the date you became resident for tax purposes into the box asking for that snippet when you filed last year? Your personal deduction for 2012 would be pro-rated to one third of the full amount, but if you didn't supply that info, you were under taxed in 2012 and likely owe CRA more than the $2K for last year.

haggis88

Yeah I've definitely filled all the boxes properly for this year and last year, i even went back to check last years and make sure!

Zoe Bell

We got hit like this one year , I think it was to do with Bens bonus that he got. Yep it sucks . dunno what your family situation is but our lack of kids etc. Seems to mean we have very little in the way of allowances and stuff to claim.

haggis88

yeah, single and don't own any property or suchlike so my tax return is very basic, no allowances to claim

now when you say bonus...was this a bonus paid as income or paid into RRSP? because i got a sizeable bonus last year, so have they possibly only been taxing me on the basic rate, not accounting for the bonus?

Zoe Bell

Bonus into pay. Caused controversy at time as I recall as usually they were given option of having it paid into rrso but not that year.
Chances are thats what's happened to you too then

haggis88

****

i probably do owe that amount then...better hope the bonus is as good this year!

montreal mike

to reiterate a point made above

you might get a nasty surprise sometime in the future if CRA finds that in fact you had, for tax year 2012, inadvertently claimed the exemption for a full year and thus you did not render to Caesar what belongs to Caesar

montreal mike

here is a useful site

http://www.taxtips.ca/

haggis88

thanks Mike, but I had assistance from the finance girl at work when I done my first tax return, so i'm pretty confident it was correct

montreal mike

simple to find out

have a look at how much you claimed in 2012 for your personal exemption

for 2012 is was 10,822 for the full year so you should have claimed much much less

many canadians may not realise that personal exemptions are prorated for newcomers

Aviator

Go and see an accountant to be sure, you can file an adjustment for 2012 if necessary. Once CRA get hold of an error, there are penalties as well as interest to pay.

The T4 is the full record from that employer. If you had other employers you'll get a T4 from them or a T4E if you claimed EI.

Just becasues someone works in finance, does not mean they do (or don't) understand the CRA tax and payroll system. Some just punch in the numbers and pay whaterver the computer tells them to pay.

If you were a tax resident for 4 months in 2012, your personal allowances on TD1 and TD1 AB were 4/12ths of the amount on the form. Claiming the full amount for a part year of residency could mean you got too much of a refund and owe CRA for 2012 as well (+interest for the underpayment).

Get professional advice.

Steve_

You could put the bonus in an RRSP and then claim the tax credit. Won't help this year but if it's a regular thing it will help.

Withholding doesn't work like it does in the UK, it's not some major science like HMRC have turned it into. There are only limited payroll withholding codes and there is no RTI like there is in the UK so it is quite easy for your withholding to be well below what you owe (or well above). Thereby giving you a large bill or a large refund.

If you contribute regularly to an RRSP (which is generally speaking a good idea, unless you're planning on leaving) then you will typically claim the RRSP tax credit and get a large refund, this can be solved by filing T1213.

Also, just a general point I make regularly but I think tax software for Canadian returns is pointless. I've yet to figure out the advantage of it, and I've seen so many people on here say they missed off some form or something because they used it. For US returns there is a point because the US tax system is way more complex but in Canada it's all integrated (except in Québec) and there are far less deductions you can claim.

Get a T1 General and follow the instructions. One of my pet peeves is the T1 Special which they send you if you do a paper return - this is the T1 General missing various boxes and therefore you are more likely to make a mistake using it (for example it doesn't mention T1135).

Most people only have a T4, T5 for bank interest and an RRSP contribution slip. Dead simple to do returns like that.

MarkG

You can pay into a RRSP until around the end of February in the next tax year and get the tax back for the previous year. I've been doing that for most of my overtime and bonuses for the last couple of years; not so important in future as I finally got the company RRSP set up to take money automatically.

Which reminds me, I have to do it for 2013 pretty soon .