ProConnection: Article ProConnection Newsletter, Published Online at Intuit Canada website, http://www.accountant.intuit.ca/Proconnection February 2005 T1 Tax Return Checklist Eileen Reppenhagen CGA., QuickBooks ProAdvisor I prepare a comprehensive checklist for personal tax season every year. Every year it seems to get longer. "Q" Will a checklist work? "A" A substantial number of my clients return each year with the list ticked off with their documents neatly piled in the same order as the checklist. "Q" Who uses the checklist? "A" Clients you want to keep. These might be the same happy clients who pay you before they leave your office. "Q" Why do we prepare checklists? "A" How many times have you advised your clients, when you reviewed the hours spent on their return, that the cost of their tax return preparation could be significantly reduced by comprehensive and complete documentation? "Q" Why is it so expensive to prepare tax returns? "A" Every time you put the client’s files away with a list of missing documentation and queries, the cost of tax preparation increases exponentially. Meanwhile, you have moved on to other work, so it’s like starting all over again. "Q" Why not send this checklist to your clients? "A" I usually put a brief note about deadlines in an email and enclose this checklist as an attachment clients print to check and return to me. To assist you this tax season I am enclosing 4 checklists that will help save you time and money. 1. INCOME Income (Total Income on Line 150) Documentation   Salaries, Commissions, Other Employment Income including: Tips from all sources, GST rebate from previous year, Royalties from your own work and/or an invention T4, T4A, Tips and Gratuities Daily Log, GST Rebate, T5 Royalties in Box 17   Pension and Annuity Income from all sources including CPP, OAS, RRIF's and foreign pensions T4A(OAS), T4A(P), T4RIF, T3, US Social Security, Foreign Pension statements, deposit information and foreign exchange rates, Status of pensions, exempt or not exempt   Employment Insurance and other benefits T4E, Statements of repayment of benefit   Taxable amount of Dividends from taxable Canadian corporations T5, T3, Schedule 4   Interest from all sources including Canada Savings Bonds, Strip Bonds, Treasury Bills, Mortgages held and Investment income T5 , T3, T5008, Broker and Mutual Fund Statements, Bond Descriptions, Schedule 4   Net Partnership Income, limited or non-active partners T5013, Resource Form, Certified Film & Production reports   Rental Income or Loss Tenant information, rents received, receipts for expenses, bank statements, debt information and interest, Calculation of cumulative profit (REOP) for ITA S. 3.1, Purchase documentation for Capital cost, UCC, Asset classes for each property, T776 for each property   Taxable Capital Gains or Losses for all capital, personal or listed property Broker statements, Purchase/Sale agreements, Closing statements, Option agreements, Mutual fund statements, Closing costs, Schedule 3   Support payments received, Child Support received Separation agreement, Proof of receipt of payment, Payee Name, Address and SIN #, T1158 Registration of Family Support Payments   RRSP income T4RSP, RRSP statements   Line 130 Other Income Foreign income including deposit and foreign exchange information, T3, Box 22, 26 (net of 31,35,46,47), Eligible Death benefits on T3 or T4A, Pension Income on T3 Box 46, Scholarships, Lump sums etc. See Schedule for Line 130   Self Employment Income or Loss from business, profession, commission, farming or fishing Sales invoices, purchase documentation, bank statements, receivables, payables, accruals, asset purchases, UCC classes, Forms T2124, T2032, T2042, T2121, Contract Payment Reporting T5018, Reserve calculations, Calculation of cumulative profit (REOP) for ITA S. 3.1   Worker's Compensation Benefits T5007 Box 10   Social Assistance Payments T5007 Box 11   Net Federal Supplements T4A(OAS) Box 21 2. DEDUCTIONS Deductions (to arrive at Taxable Income on Line 260) Documentation   Registered Pension Plan (RPP) T4 Box 20 or T4A Box 32   RRSP Schedule 7, receipts, broker statements, mutual fund statements, CRA Statements for Home Buyers, Life Long Learning   Saskatchewan Pension Plan Statement, receipts   Annual Union, Professional or like Dues, Professional Liability Insurance T4 Box 44, slips and receipts   Child Care Expenses T778, slips, receipts, Payee name, address, SIN # or BN#, doctor's letter supporting infirmity, calendar or day timer to support claim in Part C   Disability Supports Invoices, proof of payment, T4 Summary, T4, Timesheets, Payee name, address, SIN # or BN# for attendant, proof of qualification for Disability T2201, proof of expenditure for work or school   Business Investment Loss Documentation of disposition of shares or loans to a qualified small business corporation, ABIL form, Receipts, contracts   Moving Expenses T1M, receipts, logs, addresses before and after, dates, income applicable   Support Payments made Receipts, proof of payment, separation agreement, T1158 Registration of Family Support Payments   Carrying Charges and Interest Expense Schedule 4, Receipts, bank statements, proof of payment, loan or mortgage statements, Recommend review of IT 533 Interest deduction policy new October 31, 2003, Calculation of cumulative profit (REOP) for ITA S. 3.1 effective January 1, 2005, source by source   CPP or QPP contributions on self-employment or other earnings Schedule 8   Exploration and Development Expenses T1229, Resource Summary   Other Employment Expenses T777, T2200, proof of payment, Km log, gas, insurance, repairs, air care, vehicle lease or purchase, interest, loan documentation, vehicle description, GST370 signed with Employer's BN#, Home office costs as applicable, Legal expenses to collect salary, repayment of WCB, etc. see form   Clergy Residence Deduction Employer completed certification on CRA form   Other Deductions See details Line 232   Social Benefits Repayment Form in ProFile   Canadian Forces Personnel and Police T4 Box 43   Employee Home Relocation Loan T4 Box 37   Security Options See details Line 249   Other Payments If income reported on line 147 see line 250 in the guide   Losses of other years, capital gains deduction Various Schedules in ProFile   Northern Residents T2222   Additional Deductions See details Line 256 3. PERSONAL TAX CREDITS Personal Tax Credits Documentation   Spousal Spouses tax return   Eligible Schedule 5 Details of dependant, net income, documentation certifying infirmity if applicable   Infirm 18 or older Schedule 5 Details of dependant, net income, documentation certifying infirmity if applicable   Caregiver Schedule 5 Details of dependant, net income, documentation certifying infirmity if applicable   Disability T2201   Disability Supplement Child care or attendant care expenses claimed for dependant by anyone   Disability Transferred from a dependant T2201, Schedule 5 Details of dependant, net income   Interest on Students Loans Statement from financial institution, proof of payment, amounts carried forward from previous 5 years   Tuition and Education T2202A, T2202, TL11A,B,C,D, Schedule 11   Tuition and Education Transferred from a child or grandchild T2202A, T2202, TL11A,B,C,D, Schedule 11, Taxable income, Personal tax credits, SIN #, name, birth date of child or grandchild   Amounts Transferred from spouse or partner Schedule 2 and spouses tax return   Medical and prescribed devices for self, spouse and all dependents Receipts, payroll stub or letter from payroll for premiums on extended health and dental insurance, certification of disability, infirmity, Payee name, address, SIN# or BN#, breakdown of attendant care for retirement homes etc. See S. 118.2(2) and Regulation 5700 of the ITA for further details   Medical Notch Provision, allowable amount of medical expenses for dependants 18 and over Line 236 for dependents 18 and over   Donations and Gifts, political donations Receipts, proof of payment 4. OTHER USEFUL INFORMATION Other Useful Information Documentation   Tax Paid by installments, balance owed Proof of payment, statements from CRA   Employee and Partner GST/HST Rebate GST 370 signed by Employer (with BN#)   Provincial Tax Credits Slips, receipts, proof of payment, statements of account   US Non Resident Alien Tax Return if you worked in the US and have US Source income Work Visa information, Number of days in the USA per year, plus previous 2 years. Please contact a professional who prepares US tax returns for more information   Assessments, re-assessments, correspondence, Child Tax Benefits, GST credits All documents and statements received from CRA   Proof of Ownership and Liability including all Foreign Property and Investments List of all owned or leased assets, all liabilities and relationship to assets, investments, business operations, Calculation of cumulative profit (REOP) for ITA S. 3.1   Citizenship and residence during and at the end of the year Proof in the form of utilities bills, property tax, etc.   Low income and other benefit plans including provincial medical premium assistance, Veterans Affairs, property tax grants and deferral for disability. Gas tax refunds See useful links at www.taxdetective.ca Problem When there is missing documentation, how do you handle the process? Solution Here’s what I recommend: Set up a Folder for Notes on the Microsoft Outlook Bar that reads ‘2004 Client Notes’ For each client, make a Note with the client's name at the top Sort the client’s Notes in Alphabetical order in this Notes Folder Record what is missing and any queries regarding the client in their Notes File. Cut, paste and edit the queries to an email and send it to the client Advise the client that work has stopped until ALL of the missing documentation is received Print a copy of the note and the email Place the note and the email to the top of the client’s file List the client's name in the Outlook Task list as a reminder to follow up Assign a date to follow up on the Task Put the client's file away and move on to other client’s work If your client calls to ask if their return is ready, refer to the email on the top of the file Note date of call and notes regarding the conversation Follow up to ensure that the client understands that lack of documentation has stopped the process Days or weeks later, missing information arrives, clear the Task from your waiting Task list to your active Task list Update the Note with responses, clear missing information and queries More queries as a result of new information, start over at 2) above Check to see if the return is now complete, enter the new data, if this leads to more questions, start over at 2) above If complete, review, assemble for signing and contact your client How will I know if this checklist worked for you? Why don’t you let me know after tax season? Drop me a note, to let me know what worked and what did not work, at my email address below.   Eileen Reppenhagen is a bean counter with a difference. A CGA since 1986, she is passionate and vocal about taxpayers' right to knowledge regarding tax credits. As past President of her CGA chapter, she is a recipient of the J.M. MacBeth Aware of Merit, CGA BC, (1993), originator and contributing author of Section 800 of the CGA Canada Public Practice Manual "Future Oriented Financial Information" (1999), and a participant in CGA Canada's Video Taking Care of Business (2000). Not only is Eileen a successful accountant, she is also an accomplished writer and speaker who leads workshops for various parent support groups and CGA BC PD Events. Known to be on the leading edge, fun, and entertaining, Eileen delivers stimulating, and practical presentations that inject clarity, understanding, imagination and humour into confusing and boring topics. Eileen Reppenhagen CGA, QuickBooks ProAdvisor Tel: 1 604 943.7414 www.taxdetective.ca   Please help us improve ProConnection. Rate it Now!

Eileen Reppenhagen, CGA