INCOME TAX $ 16000 nope it was just not enough taken off.for the goverment end

globaldesigns · #1 03-16-2011, 03:10 PM

Quote:

Originally Posted by TheMikey

If H&R Block did your taxes, aren't they liable for some kind of damage? I mean this is a pretty huge oversight by someone who's been paid to do your taxes.

Personally I never recommend H&R Block... They are not even real accountants, just trained people with very little to no knowledge of taxation. I went there once years back, and they wouldn't even allow me to write off the previous years accountant fees. I was self employed and allowed to. But they said no, so I left... Never again.

I wish you luck on working this out, as that is a big chunk of change.

TheMikey · #2 03-16-2011, 04:01 PM

Oh, I am by no means recommending H&R Block. Asmodeus just said they did his taxes and messed up pretty bad. I see no reason he can't go to them to see what they can do. At the very least, he should get a refund on the services as they were paid for something they didn't do correctly.

StirCrazy · #3 03-16-2011, 04:58 PM

um, you don't have to the end of april to pay it back, you can make installment payments. if you owe over 3000.00 you can spilt it in to 4 payments one evey 3 months.

here is the info http://www.cra-arc.gc.ca/E/pub/tg/p110/p110-e.html

Steve

Skimmerking · #4 03-16-2011, 05:22 PM

i'm checkng in to this folks Im trying to figure out what is happening and what theheck went wrong. We did take out a loan for 10,000 for RSP's and have to pay that back and im getting back 4200 and that will be used for that money. She is also a realtor and is self employed that is how they work. SO i guess that she made 80,000 last year and with the deductions she got it to 46,000 and so she paid taxes on 46,000 which works out to 11,300 something like that . plus the GST that she has to pay.
so it adds up so i guess the we are going to use the 4200 that i got to off set the money. i may take that and put it back into RSP to help it out .

i told her that she shopuld get someone else to check it this lady is a accountant for the firm that she works at.

cwatkins · #5 03-16-2011, 05:46 PM

I make similar and ALL my taxes only add up to that.

But it sounds like the big hit is paying all the tax on the withdrawn RRSP's you took out. I'd pay that back instead and your taxes should drop like a rock.

Unless you absolutely need the RRSP money, I'd avoid touching it, unless it is through the Home Buyers Program which allows a tax free withdrawl of RRSP's for first time home buyers.

I think interest on a line of credit would be cheaper than the tax bill...

P.S. Maybe call the CRA and see what your options are? Make sure to talk to someone who actually knows something, not a temp. They have a lot of temps this time of year.

mike31154 · #6 03-16-2011, 08:26 PM

Quote:

Originally Posted by cwatkins

I make similar and ALL my taxes only add up to that.

But it sounds like the big hit is paying all the tax on the withdrawn RRSP's you took out. I'd pay that back instead and your taxes should drop like a rock.

Unless you absolutely need the RRSP money, I'd avoid touching it, unless it is through the Home Buyers Program which allows a tax free withdrawl of RRSP's for first time home buyers.

I think interest on a line of credit would be cheaper than the tax bill...

P.S. Maybe call the CRA and see what your options are? Make sure to talk to someone who actually knows something, not a temp. They have a lot of temps this time of year.

You may have misread, I don't think he withdrew money from an RSP. He/they took out a loan to buy RSPs in order to bring taxes down.

cwatkins · #7 03-16-2011, 08:47 PM

Quote:

Originally Posted by mike31154

You may have misread, I don't think he withdrew money from an RSP. He/they took out a loan to buy RSPs in order to bring taxes down.

Ah, then it really sucks

As global mentioned, maybe look into incorporating and going the dividend route. Works well for me, but I guess each case is different. Just keep in mind you wouldn't be paying into CPP or EI... So that's one downside.

Cheers.

Bblinks · #8 03-16-2011, 06:13 PM

You don't have to pay it all of it back at once, I had around 4600 tax bill last year, I paid it in 4 installments at 2% interest rate. sorry to hear that. good luck.

globaldesigns · #9 03-16-2011, 06:36 PM

Quote:

Originally Posted by TheMikey

Oh, I am by no means recommending H&R Block. Asmodeus just said they did his taxes and messed up pretty bad. I see no reason he can't go to them to see what they can do. At the very least, he should get a refund on the services as they were paid for something they didn't do correctly.

I agree, he should go back. If they screwed up, they should stand by their work and try to fix things for him.

patman · #10 03-16-2011, 07:24 PM

Doesn't sound like it's wrong. I know it sucks, but that's pretty typical when you are self-employed and make more money for the first time. The biggest problem is the CPP on the self-employed income which would be close to $4000 of the $11,300. Most of my realtor clients just send in their total GST collected and then get a refund on their input tax credits when they file. And they usually also send in about 15% of their gross earnings just so they don't have this problem. They will give you a little leeway on your taxes and charge you interest at about 7%, but they will hound you to death about your GST if you are behind. Make sure you file it on time though so you don't get hit with the penalties.

Also be prepared for them to send you a nice little present in August requesting installment payments of about $5650 on Sept 15 and Dec 15 for 2011. They only let you go one year and then you need to pay along the way again.