All my tax slips have arrived, so I decided to get an early start on my taxes. I currently use Wealthsimple Tax (previously SimpleTax) because it meets my tax needs, helps optimise joint returns, and the price is right. It supports auto-filling forms from the Canada Revenue Agency (CRA) website, a feature that saves typing and reduces typos.
Unfortunately, auto-fill can cause issues. Sometimes, T-slips are slow to appear on the CRA website - last year many of them were never available. I can enter in the T-slip information manually but then have to be sure that a subsequent CRA auto-fill does not create duplicates. Financial institutions are not required to issue T-slips for interest under $50, so they are not available from the CRA site. However, we still need to report the income.
I track all investment activity via Quicken and use it to calculate capital gains from stock and fund sales. Brokerage firms report the income and cost base to CRA, which issues T5008 slips via auto-fill. Unfortunately, the brokerage firm cost base calculations rarely match Quicken. My broker finally admitted last year that they were not handling some Return of Capital transactions correctly. I can modify the downloaded T5008 information, but matching the T5008 slips against my records can be challenging: The T5008 slips do not include dates, and a single sale that was slip into multiple transactions will result in multiple T5008 slips
I regularly donate securities since capital gains are typically excluded from taxes - there is a complicated formula if I receive any "advantage" from the donation. Wealthsimple Tax provides a special form to record these donations of securities. However, T5008 slips are also issued for these sales of securities so I must delete them. Matching the T5008 information to my records can be time consuming. The T5008 shows the value when my brokerage firm processed the securities transfer. but I record the stock sale based on what the charitable organisation received.
CRA auto-fill can reduce entry errors, but it is still the taxpayers' responsibility to ensure they pay all taxes owed, certainly not less, and ideally not more. I spend most of my time updating my Quicken records to reflect additional T-slip information not available throughout the year and cross-checking everything. In comparison completing Wealthsimple Tax, checking for errors, optimising joint returns, and filing my returns is usually straightforward.
Blog comments