Alam Accounting & Tax, CPA
2312 Eglinton Avenue East M1K 2M2 Toronto, ON, Canada

In Canada, the 2020 Income Tax filing for individuals will start from Feb 24, 2020 and will end April 30, 2020. The deadline for Sel-Employed and their spouse is June 15, 2020; however, any tax owing must be paid within April 30, 2020. Failure to file tax return within deadline is important as it negatively affects: a) On your refund; b) Government benefits; and c) Penalty and interest levied by Canada Revenue Agency (CRA)... The penalty would be 5% on your tax balance owing plus 1% of your balance owing per month for up to 12 months. Interest would be 6% on balance owing including penalty. Mustafa Alam

CRA is looking into the sharing economy The Canada Revenue Agency has identified tax evasion in the sharing economy especially from the hosts of AIRBNB. It says, it’s losing billions of dollars every year through unreported income from the sharing economy, which includes Airbnb. CRA has already started to monitor this sector, focusing on hosts that are providing short-term accommodations as a business. Airbnb is planning to work with its hosts across Canada during tax season ...by sending out an annual income tax reminder that contains links to their annual earnings and to CRA and Revenu Québec webpages as well on how to show this short-term rental income on their tax return. AIRBNB also intends to build a partnership with H&R Block that provides educational tools and discounts to hosts for their tax filings. The hosts, however, can claim all relevant expenses against their rental income to lower their tax liability. The most recent federal budget gave the CRA an additional $66 million to target non-compliance in this digital economy. See more

TaxFree Savings Account (TFSA) The Tax Perspective The TaxFree Savings Account (TFSA) is an account that allows individuals to earn taxfree investment income. Canadian residents aged 18 years or older can open and contribute to a TFSA Account. TFSA contributions are not tax deductible; however, any investment income within the account will not be taxed, even when withdrawn. This investment income has also no effect on your Old Age Security (OAS), Guaranteed Income Supplement (GIS) or Canada Child Tax Benefit. As contributions are not tax deductible, receipts are not issued or even necessary for filling an income tax return. However, there is a limit of contribution to TFSA account in a year which can be accessed through My Account on the CRA website.

In order to minimize the Tax Gap, combat tax evasion and aggressive tax avoidance, CRA expedites it’s target compliance activities. Under this plan, CRA has invested over $1 billion and in the current budget, government keeps a provision of $150.8 Million to hire additional Auditors and for other developments. The Canadians must be more careful than any time in the past.