T1198 (Assorted Topics)
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Re: T1198 (Assorted Topics)
Sort of have conflicting info here Sparrow. I called CRA last week and asked that very question. This is the answer I got...
If the client paper files the TG-1198 by the end of March and CRA does not have it done by the end of April NO penalties. Because it is in CRA's posession and it's not the clients fault.
But if the client waits until the end of April to file then yes there will be a penalty.
Basically I was told give CRA at least 4 weeks to do the calculations. If you do not get your return 4 weeks after you file CALL CRA and find out what the hold up is and state the date you sent your tax return.
If the client paper files the TG-1198 by the end of March and CRA does not have it done by the end of April NO penalties. Because it is in CRA's posession and it's not the clients fault.
But if the client waits until the end of April to file then yes there will be a penalty.
Basically I was told give CRA at least 4 weeks to do the calculations. If you do not get your return 4 weeks after you file CALL CRA and find out what the hold up is and state the date you sent your tax return.
Teentitan- CSAT Member
- Number of posts : 3407
Location : ontario
Registration date : 2008-09-19
T1198
In speaking with our tax accountant this morning, it was indicated that the T1198 form may take much longer to process than end April. In our case, we owe taxes to CRA and therefore will be required to pay the tax bill in advance of any likelihood of having our T1198 processed through the channels at CRA. I know some were thinking they could potentially receive an amended tax bill as a result of the T1198 recalculations prior to end of April however that seems to be very unlikely. Just thought I would put that scenario out there so everyone is prepared.
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Re: T1198 (Assorted Topics)
Thank you, propat is always on top of things, and we certainly will do all we can to help.
I think once the members here start to complete their return, we should start a new thread, like ( processing retro tax return ) so many different accountants that are involved where information can be shared between all of us, I think this may be of some help in the processing process. We can be discreet on our personal income, but can help with methods used to lesson the impact.
I think once the members here start to complete their return, we should start a new thread, like ( processing retro tax return ) so many different accountants that are involved where information can be shared between all of us, I think this may be of some help in the processing process. We can be discreet on our personal income, but can help with methods used to lesson the impact.
Guest- Guest
Re: T1198 (Assorted Topics)
thanks trooper...between you and propat I know we are in good hands
Guest- Guest
Re: T1198 (Assorted Topics)
Thanks Trooper. What would also be helpful to know and post is an actual itemized list of tax forms to be received by MC and Sisip for our 2013 tax return (as I am not quite clear of this) so that us non tax savvy people are certain we have everything in hand to do our taxes. As in how many T4's, T5's, etc etc....and an explanation of what they are in ref to our case....
Last edited by Carver on Sun 09 Feb 2014, 11:19; edited 1 time in total
Guest- Guest
Re: T1198 (Assorted Topics)
Looking through past post of 2013, found where the first member to post receiving their 2012 T4 from Manulife was Monday February 25th.
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Re: T1198 (Assorted Topics)
My legal fees were 33000 and all I get is a 4500 dollar tax credit, bill of goods , As Acerman once said in these hallowed chambers " we were sold out"
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Re: T1198 (Assorted Topics)
Thank you very much Propat, I just want everyone to be prepared , this tax issue really screwed me. I had to borrow to cover my ass and anyone who got a hefty retro amount will be screwed. Open up , swallow your pride, it's coming
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Re: T1198 (Assorted Topics)
navrat I found that example sorry it took so long ive been very bussy.
After talking with Peter this morning I have decided to send a letter of objection based on the Tax Nuetrality top up of 3.27%.
Heres why: I will show you a QRLSP Tax return I did from 1990-2002 having the income spread out and being assessed with the revised Taxes + the additional Deemed taxes so you can see the impact, that alot of Zero Sums are facing. Note revised tax is also known as the( Tax Difference)
revised tax 2002 = 0 Deemed tax =0 Deemed tax % applied=0
revised tax 2001 =0 Deemed tax=0 Deemed tax % applied=0
revised tax 2000=1202.83 Deemed tax=121.40 Deemed tax % applied=10%
revised tax1999=1830.64 Deemed tax352.29 Deemed tax% applied=19.5%
revised tax1998=1887.64 Deemed tax528.74 Deemed tax % applied=28%
revised tax1997=1823.89 Deemed tax680.15 Deemed tax% applied=38%
revised tax 1996=2490.17 Deemed tax1136.89 Deemed tax % applied=46%
revised tax 1995=2419.79 Deemed tax1350.65 Deemed tax%applied=55%
revised tax1994=2607.23 Deemed tax 1864.78Deemed tax%applied=72%
revised tax1993=4582.84 Deemed tax 3939.43 Deemed tax applied=86%
revised tax1992=1725.44 Deemed tax1733.18 Deemed tax %applied=101
revised tax 1991=0 Deemed tax =0 Deemed tax% applied= Guess 120%
revised tax 1990=678.64 Deemed tax=993.93 Deemed tax % applied=146%
This was just the federal portion. Total Tax Difference= 21,249.11 Total Deemed taxes=12,701.44
Deemed tax % overall= 60% in additional Taxes Tax nuetrality top up + 3.27% ? is it even fair or close?.
propat
After talking with Peter this morning I have decided to send a letter of objection based on the Tax Nuetrality top up of 3.27%.
Heres why: I will show you a QRLSP Tax return I did from 1990-2002 having the income spread out and being assessed with the revised Taxes + the additional Deemed taxes so you can see the impact, that alot of Zero Sums are facing. Note revised tax is also known as the( Tax Difference)
revised tax 2002 = 0 Deemed tax =0 Deemed tax % applied=0
revised tax 2001 =0 Deemed tax=0 Deemed tax % applied=0
revised tax 2000=1202.83 Deemed tax=121.40 Deemed tax % applied=10%
revised tax1999=1830.64 Deemed tax352.29 Deemed tax% applied=19.5%
revised tax1998=1887.64 Deemed tax528.74 Deemed tax % applied=28%
revised tax1997=1823.89 Deemed tax680.15 Deemed tax% applied=38%
revised tax 1996=2490.17 Deemed tax1136.89 Deemed tax % applied=46%
revised tax 1995=2419.79 Deemed tax1350.65 Deemed tax%applied=55%
revised tax1994=2607.23 Deemed tax 1864.78Deemed tax%applied=72%
revised tax1993=4582.84 Deemed tax 3939.43 Deemed tax applied=86%
revised tax1992=1725.44 Deemed tax1733.18 Deemed tax %applied=101
revised tax 1991=0 Deemed tax =0 Deemed tax% applied= Guess 120%
revised tax 1990=678.64 Deemed tax=993.93 Deemed tax % applied=146%
This was just the federal portion. Total Tax Difference= 21,249.11 Total Deemed taxes=12,701.44
Deemed tax % overall= 60% in additional Taxes Tax nuetrality top up + 3.27% ? is it even fair or close?.
propat
Guest- Guest
Re: T1198 (Assorted Topics)
A T5 is a Statement of Investment Income. A T5 is a tax information slip prepared and issued by organizations which pay interest, dividends or royalties to tell you and the CRA how much investment income you earned for a given tax year.
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Re: T1198 (Assorted Topics)
Carver, I know that they do not withhold taxes with the T5, I just found out that they will issue us the T5 as per above post. I followed it up with and inquiry that prove to validate just that. If you look at your calculation sheet and subtract 30% of the total amount of your retro including the interest, the result should not be the same as your net, do this before you deduct the Legal fees. Now deduct the 30%, without the interest, your number should come close to your net. Now I know why there was much confusion about the amount of taxes withheld at the time of our retro. So if I am correct on this, which I hope that I'm not, this will hurt us big time, as we will have to pay the full amount of taxes required on our interest received for the 2013 calender year.
Apparently, they wanted to withhold taxes on the interest, however the CRA refused to allow it, I will take a guess and say why they refused it, the tax act does not allow for it.
Apparently, they wanted to withhold taxes on the interest, however the CRA refused to allow it, I will take a guess and say why they refused it, the tax act does not allow for it.
Last edited by trooper on Fri 07 Feb 2014, 18:57; edited 1 time in total
Guest- Guest
Re: T1198 (Assorted Topics)
trooper, am I understanding you correctly that the T5 is for the interest earned on our retro however it was not taxed? If so, why are we only realizing this now?
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Re: T1198 (Assorted Topics)
As they say...."death and taxes"...
Sapper Zodiak- CSAT Member
- Number of posts : 963
Age : 55
Location : warm side of the rockies...
Registration date : 2012-11-12
Re: T1198 (Assorted Topics)
Navrat, yes during their special calculations they may include the notional amount of interest that is computed for each relevant preceding year to take into account the fact that this additional notional tax was not paid during those preceding years. This is sometimes applied when sending in the T1198, it is called notional amount of interest. It is sometimes added to the tax paid for any or all preceding years. In any event if the special calculations turns out not to be of benefit to you, your T1198 will become VOID. This notional amount of interest is not always used, anyhow if they use it in our case, and it still turns out to benefit us, who cares, as long as we benefit from the form.
The one thing that concerns me is the T5, as my interest on my retro was high, no way of getting around it. I know that part of my return will hurt me big time.
One last thing I would say, I know that this tax ordeal is coming upon us soon, I am trying to take it all in, in a calm manner, it is not pleasant, I am sure most of us are worried about it, as we should be, however it is not the end of the world. We will do our taxes and see where we stand, those of us who get hit hard will have to accept it and move forward.
The one thing that concerns me is the T5, as my interest on my retro was high, no way of getting around it. I know that part of my return will hurt me big time.
One last thing I would say, I know that this tax ordeal is coming upon us soon, I am trying to take it all in, in a calm manner, it is not pleasant, I am sure most of us are worried about it, as we should be, however it is not the end of the world. We will do our taxes and see where we stand, those of us who get hit hard will have to accept it and move forward.
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