Completing Your Taxes: The Ongoing Assessment Process You Should Know
After meticulously organizing your paperwork, performing all the necessary calculations, and submitting your tax return on time, many Canadians believe they can finally set aside their tax-related thoughts for the rest of the year. However, that is not always the case. In reality, once you file your tax return, it can undergo multiple assessments by either the Canada Revenue Agency (CRA) or Revenu Québec to ensure its accuracy. Therefore, before stowing away your documents, it is crucial to ensure you have received your Notice of Assessment (NOA).
Understanding the Notice of Assessment (NOA): Why It Matters and What It Includes
The Notice of Assessment (NOA) is a crucial document that you receive from the Canada Revenue Agency (CRA) or Revenu Québec, depending on your jurisdiction. Whether your taxes were filed by a Tax Expert or if you completed them independently through online filing, the NOA serves as a comprehensive review outcome of your return. It provides essential details about your income for the year, the credits and deductions you claimed, and most importantly, it outlines any additional tax you may owe or the amount of your tax refund. If the government’s calculations differ from your initial filing, the NOA will explain the adjustments made.
With its wealth of significant information, understanding the NOA is vital before considering your taxes fully completed for the year.
When Will I Receive My Notice of Assessment (NOA) and What Should I Do?
The timing of receiving your Notice of Assessment (NOA) and the necessary actions to take depend on various factors. Here’s what you need to know:
- Online Mail Option: If you have opted for online mail through your CRA My Account, you can receive your NOA immediately after filing your return using the CRA’s Express NOA service. It is processed instantly upon filing.
- Paper Copy Delivery: If you are receiving a paper copy of your NOA, it typically arrives 1 to 2 weeks after your return has been assessed. If you are entitled to a refund and haven’t signed up for direct deposit, your NOA will be attached to your refund cheque. Otherwise, it will be mailed separately.
- Québec Residents: For residents of Québec, you will receive your NOA from Revenu Québec within 2 weeks if you filed your return online, or within 28 days if you filed by mail. If you registered for online delivery, you can access your NOA through your Revenu Québec My Account. Otherwise, a paper copy will be sent to you.
Understanding Changes on Your NOA:
If you notice changes made by the CRA or Revenu Québec on your NOA, it is important to understand the reasons behind those adjustments. Mistakes can happen, even after double-checking your numbers. The NOA provides an explanation for any changes made by the tax authorities, such as additions or corrections to your claimed amounts.
Relevance and Storage of Your NOA:
The date on your NOA serves multiple purposes. It establishes the deadline for objecting to any changes made by the CRA or Revenu Québec and marks the beginning of the three-year period during which they can reassess your return. After this three-year period expires, reassessment is limited, except in cases of fraud or negligence.
Keeping your NOA is essential, as it contains valuable information for future tax returns. It includes your Registered Retirement Savings Plan (RRSP) contribution limit, Tax-Free Savings Account (TFSA) limit, carry-forward amounts (such as capital losses and unused credits), and repayment information for programs like the Home Buyers’ Plan (HBP).
If you misplace your NOA, there are options to retrieve a copy. Through your CRA My Account or the My CRA app, you can access NOAs, and notices of reassessment issued after a specific date. Similarly, Revenu Québec’s My Account for individuals allows you to view and print copies of NOAs issued since 2004.
Keeping your NOA secure and easily accessible is crucial, as you may need it for various purposes beyond filing your taxes. It may be required as proof of income for mortgage or loan applications or requested by social programs to verify your annual income from the previous year.
Also read: Outsourcing Bookkeeping Services: Why It’s Beneficial
Ace Your First Tax Filing: 5 Essential Tips
Navigating and ace your first tax filing return in Canada may appear daunting, but it doesn’t have to be! Whether you’re a first-time filer or preparing for another tax season, rely on these five useful tips to alleviate the stress of filing your return and ensure you receive what you’re entitled to.
5 Essential Tips for Smooth Tax Filing in Canada
Stay organized for hassle-free filing.
To complete your tax return accurately, gather all necessary tax slips from organizations like your school, employer, or the government. If you’re a Québec resident, you’ll receive both federal and provincial information slips. Keep track of receipts for credits, expenses, and deductions requested by the CRA or Revenu Québec. Develop a habit of filing receipts promptly, whether in a physical folder or a digital one, ensuring they are accessible for reference. Retain all documents for at least 6 years in case of a detailed review.
Be aware of key deadlines.
Utilize a calendar or calendar app to stay updated on significant tax-related dates, such as the opening of electronic filing and tax filing deadlines. Set reminders on your phone to be prepared when the time comes. Subscribe to newsletters or regularly check the H&R Block Tax Tips Blog for timely updates and potential filing extensions. Remember, even if you had no income for the year, filing a return is crucial to determine your eligibility for various federal and provincial benefits.
Determine your relationship status.
Understand how your marital status affects your tax preparation approach and entitlements. Whether single, married, divorced, separated, widowed, or in a common-law relationship, your status influences how you ace your first tax filing and the potential benefits available. Explore resources that explain how you can optimize tax credits and deductions through pooling, splitting, or transferring with your spouse or common-law partner.
Take advantage of available assistance.
With over 60 years of tax preparation experience, this Block provides tailored tax solutions and access to a vast network of reliable Tax Experts. Benefit from Maximum Refund Guarantee to ensure you maximize your return. Special rates are available for students, new Canadians, and low-income families through partnerships with select organizations. Online tax software allows for free preparation of your 2020 return, with the option to upgrade for additional support.
Create an online account for future convenience.
After filing your first return in Canada, consider creating a CRA My Account (and Revenu Québec My Account for Individuals, if applicable). These accounts provide convenient access to your tax information, including refund status, past tax slips, direct deposit setup for benefits, and secure messages from the CRA or Revenu Québec. Verify and update personal information, such as name, marital status, and address, before filing your return.
