Taxpayers have up to 10 years to fix incorrect returns
It’s truly surprising how many people are behind in their tax filing obligations—for multiple years in some cases, it seems. If you’re one of them, you may be wondering what options you have, particularly as we roll into December.
Ignoring the issue could be particularly expensive, unless you know how to take advantage of Taxpayer Relief provisions, says Evelyn Jacks, author of Essential Tax Facts: Simple tips for preparing your 2010 tax return and saving money the rest of the year.
If you’re not able to pay your taxes, the CRA offers payment options and may even waive some of your tax debt by approving your application for Taxpayer Relief. And, sometimes, going back in time can work in your favour.
Yes, that’s right. It’s possible to reach back to recover errors and omissions on federal tax returns for up to 10 prior years. Such a proactive stance could obviously help taxpayers recover many thousands of dollars in missed tax overpayments and refundable tax credits, Jacks maintains.
At the same time, filing prior missed returns can also help you build important “contribution room” for RRSPs and TFSAs. It can also ensure that capital losses, which can offset capital gains in the future, are recorded, and help carry over provisions for charitable donations, tuition and education amounts for future use, she says.
Remember, it’s your legal right to prepare your return to your family’s optimal benefit by digging for every tax deduction and credit you are entitled to. This includes filing missed prior returns or adjusting for errors or omissions on prior filed returns, which can bring additional tax refunds to your door.
Have you ever reviewed your returns to correct past mistakes? Did the exercise put money in your pocket?
By Gordon Powers, MSN Money