Legal Fees (Assorted Topics)

Trooper

Great topic lots of information, I have an accountant and he seems to think that when you take the retro and add it to this years pensions, CPP, DND, PIA and SISIP that it will send me way over the top and have me oweing another $40,000 in taxes on top of the hold back and that is after maxing out every possible tax saving trick I can find.

Also my accountant said one thing about CRA that sticks out and the spreading out of the retro. once you do it that way they(CRA) can now go back if they want for up to 3 or 4 years and re assess that years taxes this is in the tax laws. He warned me about this so unless we have some sort of "get out of reassessment card" thanks to the law suit than we need to be sure.

Just an FYI from some info that I have been given.

So is there some thing I am not getting here about the issue with the retro and our income for this year and combining them for the year and taxes?

Sparrow what is the number for the form on the CRA site? Please and thank you.

I have completed the CRA Tax Payer Relief forms for spouse and I. I have included the financial documentation that was in the MC Purolator package and a copy of the Courts decision April 15, 2013. Likely, if CRA even considers this relief, further financials will need to be submitted however, I encourage everyone to apply regardless of their financial situation. The likelihood is not great of being approved however, it is wise to have the preverbal paper trail in the event this time next year veterans have a better grasp on this issue and hopefully options.  And who knows, maybe some will be approved.

Hey guys and gals...everyones situation is different. My only income was from cpp, since 1989, save a few months of sporatic employment. If I take my income back in the years I should have received it, it still puts me in the lowest tax bracket.I have looked into this and see no problem going back in tax years. For some with military pensions, it may be quite different though. Just see how it pans out. Get a tax accountant. And don't worry about what you cannot change. Time will tell.
Sapper

Thank you trooper and propat for your contributions and in put which is appreciated by all.

trooper you are absolutely correct I love to exchange ideas with you even if they differ because it never gets personal. yup we will both be here come tax time. one of us will be wrong buds and I pray the frack its ME . I WANT TO BE WRONG ON THIS ISSUE. not so much for me as a 5 year guy but for the long term guys the ones fracked the most by the clawback.

propat

I agree with you Navrat, as long as CRA doesn't apply deemed taxes to those past years.

If you had little income during the past years , the retro being spread out must be of benefit to you!

propat, you know I have the utmost respect for you, and you know that I have absolutely no problem challenging you on this issue, reason being is that you are a mature individual, who goes out of the way to help, and support others, you except the challenge with respect, I think it's great that two individuals can have completely different views on this important topic, but continue to respect each other, just different views is all, I don't see anything wrong with that. I don't believe either one of us is going to fade away from this site anytime soon, so come tax time, we will be able to see for ourselves, how it plays out, if what I have stated turns out to be false, I will be here to say that I was wrong. Anyhow propat, always a pleasure discussing any topic with you.

the form only gives them the means to do the calculations if you choose to take it over the past years then they MUST recalculate the past years taxes.

FOR ALL THOES WITH LONG RETROES IMPORTANT;
you were in most cases not paying in the high ore middle tax bracket like me you were paying the low rate.

FILL OUT THE T 1198 FORM;

they will tell you that taking this in one year is best for you.

if they tell you this AND THEY WILL follow that advice.

just because you were paying the low rate in those past years and will pay the high rate this year DONT BELIVE FOR ONE SECOND THEY ARE JUST TRYING TO FRACK YOU AND TELL THEM TO TAKE IT OVER THEY PAST YEARS.

they are not trying to frack you the legislation already does that. PLEAS DO AS THEY SAY AND MAKE SURE RIGHT NOW YOU SAVE ENOUGH OF YOUR RETRO TO PAY TAX IN ONE YEAR. OTHERWISE YOU WILL JUST BE FRACKING YOURSELF.

I showed you past QRLSP calculations, peters message,a letter from the CRA, the act that applies, and open court testimony from the former head of the CRA responsible for this program of how this is applied. this is overwhelming evidence of how this legislation is applied.

so at this point there is no convincing you trooper so if you are a long term guy all I can say is do yourself a big favor an be prepared to take the hit in one year pleas and that should go for all long term guys. if me the legislation peter and the former CRA head are right you will be prepared. if we are all wrong then you will have some extra money in the bank come tax time.

BUT PLEAS BE PREPAIRED TO TAKE THE HIT IN ONE YEAR!

propat

propat, that is incorrect, the T1198 form states that they will be no reassessment, and if you send it in along with your return, the CRA will choose if it proves to be in our favor. The CRA will do the calculation, (RETRO ONLY) , they will not reassess your return, they will simply do the calculation for those years to see if we can benefit from it. I think there is much confusion between ( REGULAR INCOME TAX ) AND ( DEEMED TAX / TAX PENALTIES ) we only pay regular income tax on our retro. They will be no penalties, just regular income tax.

if you choose to take it over past years you will be reassessed and will pay deemed tax.

propat

No reassessment = No Deemed taxes / No Penalties.

Deemed taxes, for those years , on those retro amounts, is kinda like a penalties because it compensates the Cra for the taxes they should have got in those years?

I would like to make clear that spreading our retro refund over the years, that it would have been payable to us, does not mean all income over those years, in other words, your retro only will be calculated, no other income will be involved. So if they were to reassess, "WHICH THEY ARE NOT" in that case all previous income would be calculated, and reassessed, and penalties would apply. I am under the impression that some members are afraid that they will be penalized on their retro by taking this route.. In order for us to be penalized they would have to do a reassessment of our returns, they are not doing a reassessment. We would have had to pay regular tax when we received our retro, doing it in this format, may prove to lesson the impact, as those tax years could be lower than the 2013 tax year, we are just paying regular tax, as if we were taxed during those previous years. ( RETRO ONLY )