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November 29, 2021

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.

Taxes 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.

If you’ve fallen behind or think you missed something a few years ago, the 2000 tax year is the one to be concerned about now. That’s because December 31, 2021 is the last day allowed for adjustments to that decade-old return.
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



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...