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Volume 2 Issue 5 | May 2014
AFTER YOU FILE......   
group-school-project.jpg Many Canadians are breathing a sigh of relief now that their 2013 personal tax return filing is behind them (self-employed taxpayers still have until 16 June 2014 to file since 15 June falls on a Sunday). But for the Canada Revenue Agency (CRA), the bulk of the work is just beginning.

 

So what exactly happens to your tax return after you file? Here's a rundown of the processing procedures, the part you never see. The first steps for the CRA depend on how it receives the returns. Returns may be filed with the CRA in one of three ways:

 

DO YOU OWN RENTAL PROPERTY OR RENT A PART OF YOUR HOME?  


wire-bound-pad.jpgIf you own property and rent it as a source of revenue, the income or loss must be reported on your tax return. If a net rental loss results, it can generally be deducted against other sources of income for the year.

Expenses you incur to earn rental revenue can generally be deducted against this revenue. These expenses can include mortgage interest, property taxes, insurance, maintenance and repairs, utilities, advertising and management fees.

 

Just for laughs

CAN MY RRSP HOLD A MORTGAGE ON MY HOME? 

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It is possible to invest RRSP funds in a mortgage on your own home. While this offers a feeling of comfort knowing that you, in effect, owe the funds to yourself (and it may be easier to obtain funds from your RRSP than from a commercial lender), there may not be any significant advantage to be gained by doing this. The mortgage must provide for commercial interest and repayment terms. Consequently, your monthly payments would not change. There will be a benefit if the rate of return on the mortgage exceeds the return you would have otherwise received on your RRSP funds. However, you will also have to take into account that a mortgage of this sort is generally more expensive to arrange.

Contact Green, Meikle & Smith Chartered Accountants
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Green, Meikle & Smith
Chartered Accountants
1020 Matheson Blvd. E., Unit 10,
Mississauga, ON L4W 4J9
Tel: 905 919 3543 Fax: 289 210 0728
This newsletter is intended for general informational purposes only and should not be construed as personalized accounting, tax or investment advice. Particular tax tips or strategies discussed here should be evaluated relative to each individual's situation and objectives. Please contact us directly if you need specific advice on your accounting, tax or business situation.
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