If you fail to report an amount on your tax return for 2016 and have previously failed to report an amount of income on your 2013, 2014, or 2015 tax returns, you may be assessed a repeated failure to report income penalty.
For prior years, the penalty calculated was 10% of the unreported amount (the provincial penalty added another 10%). Under proposed changes, the penalty will not apply unless the amount of the unreported income exceeds $500. The federal and provincial or territorial penalties will each equal to the lesser of:
• 10% of the unreported income, and
• 50% of the difference in tax owing on that income (net of any withholding tax).
We cannot stress enough the importance of including all of your T-Slips when filing your tax return. The most common oversight is misplacement of T-Slips, or not knowing where/how to retrieve them. If you have investment accounts, one way to confirm receipt of all slips is to review your statement as at December 31, 2015. Your financial institution will normally provide a list of companies that will be reporting income.