How To Avoid A CRA Tax Audit
Most of the people are so afraid of Tax Audit, that just hearing this word is enough for them to shiver up their spine. Learning some tips that can help in avoiding a CRA tax audit would be a great idea.
So for your help, here are few things that you should consider, if you want to avoid tax audit:
Claim tax deductions that you are allowed to
Make sure that you claim all the deductions and legitimate credits that you are entitled to. Any types of doubtful items found on your tax return could sound suspicious.
If this happen, you should always send an explanation or a supporting document to substantiate the claims legitimacy with the return.
So, if your return is reviewed by a real person, these explanations can help you a lot and save you from a CRA Tax Audit. If you are confused and couldn’t handle the pressure, you may take help of CPA Toronto based firms, to get it done right.
The discriminant index function:
The CRA make use of a computer program to flag the tax returns. This program compares the deductions of a taxpayer with others in the same income slot.
This particular program is able to give every return generated by the computer that specifies the chances of any questionable items present on the return. The more your return differs from what is called as normal in the program, the higher are the chances of you getting audited.
To get more familiar about this fact, you may see tax audit Toronto cases, which you can easily find on the internet.
Some of the common CRA Tax Audit causes
You must report all your revenue if you want to avoid a CRA tax audit. The intelligent computers of CRA will compare the income that you have reported in your return to the information that it receives from employers, banks and brokerage firms.
You would not have wondered, but being in business also triggers a Tax Audit, particularly if you are a sole owner. This is because the CRA assume a self-employed businessman has more opportunity to hide income than a salaried person.
If you are interested to read more about CRA Tax Audit, you may read other informative articles available on the internet.