Happy New Year!
With the wonderful wintry start to this season, we are that much closer to our favourite time, tax season! As always, the team at DSK is looking forward to helping you in managing your Canadian and US income tax compliance obligations for the 2018 tax year.
We’d like to some behind the scenes information on the process that each and every one of your tax returns goes through in our office before you are called to come in and sign your form. We also want to pass along some suggestions of things that you, the client, can do to assist us in making sure your return is completed accurately and on time.
Whether you drop off an envelope of paperwork with reception, in our secure drop box, or send us your information electronically, every individual return is logged into our job management system which helps ensure nothing falls through the cracks.
Once logged into our system for proper tracking it is transferred to the initial tax compliance staff who sort and collate your information. When complete, your tax slips, donation receipts, medical receipts etc. are scanned onto our servers. This allows us to retain a copy of your information while returning all original documents to you. We will return to why we scan everything in just a little bit!
After scanning, our preparer signs into the Canada Revenue Agency secure site for professionals and downloads certain information into our tax software. This includes data such as your RRSP contribution limit, any contribution carryforwards and information from T4’s and T3’s that have been filed with CRA. This is a new step that has been available for the last couple of years and allows us to reconcile the information you have provided to the information CRA has on file, minimizing the risk of undeclared income. The preparer then completes the return, contacting you if there are any questions.
At this stage, the return moves onto a senior technician for review, to ensure there are no data entry errors as well as looking at the larger picture of the tax return. Things that are looked at in this stage are considerations such as whether the items being claimed make sense when compared to prior years, and if there are more complex items that need a closer review.
Your return now moves on to a manager or partner. We look at the trends on the tax return over the filing history we have available, ensure any available credits or deductions have been picked up and see if there are planning opportunities which should be communicated to you. Many times at this step, it isn’t what is on the return that will trigger a question or comment, rather what isn’t there.
Once the return has received this final, third sign off it is passed on to our administrative team for printing and assembling. As well as printing a hard copy of the return we generate a PDF copy which is retained on our servers so we will always know what was originally provided to you.
After we receive your sign off, we electronically file the return with the taxing authority (Canada Revenue Agency or the Internal Revenue Service). This is where the earlier step of scanning the information provided to us can come into play. With electronic filing no receipts are sent along with the return to CRA. In order to help ensure compliance CRA will request verification of information from a percentage of electronically filed returns each year. This could take the form of asking to see medical receipts, donation receipts or a separation agreement to support spousal support among others. Having the documents on file we are able to immediately respond to the CRA request. Our processes allows us to respond on your behalf, generally with no additional fee being needed.
As you can see, the tax compliance process is multifaceted and perhaps more involved than it may look from the outside. We do everything we can to ensure accuracy, completeness, and that you are supported in the event of a CRA review! We hope you find this entry informative and provides confidence that you have made the right choice in trusting your tax compliance needs to DSK.