The paperwork you prepared, the calculations you did, and the tax returns you filed were all done on time. Taxes are something that many Canadians believe they can ignore for another year after filing their tax returns. In reality, that's not always true. The Canada Revenue Agency (CRA) or Revenu Québec can assess a tax return several times once it has been filed to ensure accuracy. If you haven't already received your Notice of Assessment (NOA), make sure you get it first.
What is an NOA, and Why Is It So Important?
Whether you used the services of an experienced accounting firm or filed your taxes yourself online, the CRA will always send you an NOA once the return has been reviewed. NOAs contain an overview of your income during the year, your credits and deductions, as well as how much additional tax you will have to pay (if any) or how much of a refund you will receive. You will learn if any changes have been made by the government compared to the numbers you provided when you filed.
When Do You Get an NOA?
The CRA's Express NOA service allows you to get your NOA immediately after filing your return if you're signed up for online mail via your CRA My Account. It typically takes one to two weeks for your paper NOA to arrive after you've been assessed. Your NOA will be attached to your refund cheque if you haven't signed up for a direct deposit. You will receive it separately otherwise. Residents of Québec will receive their NOA within two weeks if they file online or within 28 days if they file by mail. By logging on to your Revenu Québec My Account for individuals, you can access your NOA if you register to receive it online. The NOA will be mailed to you otherwise.
What To Do If CRA Makes Changes to Your Returns?
It is possible to make mistakes even if you double-check all of your numbers. CRA would add the Canada Employment Amount to your return if you forgot to claim it. Your NOA would include an explanation if you made an incorrect claim. Changes made by the CRA aren't subject to your action, and any penalty or interest associated with them will be explained. Computer-generated NOAs may contain specialized explanations that aren't easily understood. If any changes have been made, you can always call the CRA to make sure you understand and agree with any changes made.
Keep the NOA Handy For Next Year
Keep your NOA somewhere you can easily find it again to use when preparing your next tax return. RRSP (Registered Retirement Savings Plan) and TFSA (Tax-Free Savings Account) contribution limits are included in this section. Despite not reporting your TFSA on your income tax form, the NoA of the CRA consists of the contribution limit for the year. CRA NOAs include carryforward amounts as well. In addition, you'll find information on financing your home with the Home Buyers' Plan (HBP) and your carried over capital losses. Overall, knowing this information will help next year's tax returns go smoothly.
Conclusion
Now you know what an NOA is and why it is so important. For more information or guidance, contact us in Mississauga, and we would be happy to help.