Summary.docx - AFM 362 Course Summary Chapter 14 Rights and...

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AFM 362 Course Summary: Chapter 14: Rights and Obligations: Parties involved: department of justice, CRA, Taxpayer, department of Finance Filing & Payment Deadlines: Income Tax Returns Filing Date Balance-due day Corporations Six months after year end Two months after year-end CCPC Six months after year end Three months after year-end Individuals April 30 or June 15 (if you have a small business) April 30 Deceased individuals Later of six months after death and the normal due date April 30 Trusts or estates Within 90 days after the end of the taxation year N/A Instalments: - Individuals : if current year & one of the prior 2 years’ tax liability each > tax withheld at source by $3000 Each quarterly instalment is the least of: (Due by 15 th day of Mar/Jun/Sept/Dec) ¼ of the estimated tax payable for the current year ¼ of the instalment base for previous year Q1,Q2: ¼ of the instalment base for the second PY; Q3,Q4: ½ (PY-(Q1+Q2)) To advice client, tell them if certain about estimate, go for it; if not, choose other options - Corporations : not required if taxes payable for current or preceding year< 3000 CCPC: quarterly instalment is least of: ( due each quarter) ¼ of the estimated tax payable for CY ¼ of instalment base of PY Q1: ¼ of instalment base for second PY Q2-4: 1/3 of instalment base for PY (net of Q1 payment) Other corporations: Monthly 1/12 of estimated tax payable for CY 1/12 of instalment base for the PY M1,M2: 1/12 of instalment base for the second preceding year; M3-12: 1/10 (PY- (M1+M2)) Penalties: Offence Penalties Late-filed tax return Balance of tax owning at tax return due date* 5%+ 1% for each complete month late Max=17% Late-filed tax return (repeat in prior 3 years) Balance of tax owning tax owning* 10% +2% for each complete month late Max=50% Under-reporting income (knowingly) Min = $100; Max= increased tax liability *50% Failure to report income (repeat offender) Income not reported * 10% Late or deficient instalments [interest charged – greater of $1000 and 25% of interest that would been charge if no instalments were made] *50% Third party civil penalty (Planner’s) Min= $1000; Max= Fee charge for planning Third party civil penalty (Preparer’s) Min= $1000; Max= 100000 + fee charged (Limit to 50% * tax on unreported income) Criminal Offences: - Failing to file a return as and when required Making a false statement in a return - Destroying and falsifying books and records Willfully attempting to evade compliance with the Act - Conspiring to commit any of the previous four offences Powers and Obligations of the CRA - Assessments and Reassessments: any time if any misrepresentation due to neglect, carelessness, wilful default, or fraud. waiver Taxpayer Normal Reassessment period Notice of objective due date Individuals 3 years Later of: Mailing date on the Notice +90 days Tax return filing-due date +1 year CCPCs 3 years Mailing date on the notice +90 days Other Corporations 4 years Mailing date on the notice +90 days -
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