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3 Tips for Avoiding a CRA Audit

 

When it comes to tax filing, the thought of getting audited by the Canada Revenue Agency (CRA) is enough to send shivers down your spine. On a brighter note, most Canadians will never have to go through a CRA audit; especially if you or your business use credible software to manage and file taxes effectively and on time.

 

In this post, we’ve rounded up some useful tips by expert tax accountants in Edmonton on how you can avoid a CRA audit and the potential penalties associated with it.  

 

Inconsistent Tax Returns

 

The CRA avoids auditing tax files that show consistent returns every year, especially if you’re filing as a small business owner or a self-employed individual.

 

If you have inconsistent and unusual changes in your tax returns or deductions year to year, the CRA may pick your returns out for an audit. If this happens, make sure you have documented proof to support the reasons for the inconsistencies or changes.

 

Not Filing the Income From T-Slips

concept illustration of a small business owner filing and calculating taxes.

 

The CRA matches every entity’s tax returns with T-slips to verify their authenticity. If you haven't been reporting incomes and other information from the T-slips you receive, there’s a high chance that the CRA might identify a discrepancy between the two records.

In this case, they'll flag your returns for a reassessment. They might even ask you for additional information and proof. Start reporting all information from every T-slip received to avoid a CRA audit for this reason.

 

Refusing to Provide Additional Information

 

If the CRA demands an explanation, additional information, or documented proof about a particular aspect of your tax return, don't refuse. Please provide them with everything you have to support your returns, such as logs, schedules, receipts, or any other information or document required. Refusing to provide the requested information will add to CRA's curiosity and lead them to issue a reassessment or audit of your returns.  

 

Seek Help from Reliable Tax Accountants in Edmonton

 

If you need help with tax filing and compliance to avoid a CRA audit and the associated penalties and interest, get in touch with Duggal Professional Corporation.

Our expert tax accountants in Edmonton will help you optimize your tax position and identify opportunities to improve your tax savings. Our team will assess your tax returns to make sure you're headed in the right direction and only paying for what's required by the law.

If you need our help, give us a call at 780-863-2224 or fill the contact form here. 

We also offer bookkeeping services, payroll services, startup planning services, and more.