a guest May 23rd, 2019 87 Never
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- As a note, your average tax rate for these years would range from about 15% to maybe 25%. I think some people might be scaring you with figures like 30% on everything. That's a good recommendation as "generic advice" for how much someone should put aside during the year if they don't know how much you'll make but not really applicable to your situation.
- However, it depends on how much you paid through sub/bit income.
- Many people in your situation are worried they will be faced with jail time, police or RCMP visits, or asset seizure. None of this is going to happen, although at some point the CRA will look into figure out your income and a while later they will get paid. The CRA has all the tools they need to make sure they get paid.
- Yes, you very likely owe a lot of money to the CRA. However, you can continue to live your life. If you are still currently streaming and making a good income then paying back this debt will be hard, but manageable. This is probably going to be on the scale of "paying back a student loan" - other people do that just fine.
- At this point you would not be looking to contact the CRA. The only thing you should be contacting the CRA about is to ask about the status of your account, update your mailing address, and ask them if they have any unresponded notices out to you. They cannot arrange a payment plan for someone who has not yet filed their returns.
- At this point a CPA will pay for themselves by putting in the due care to find eligible expenses (and going back to support them through records you can find is worth it), and a successful VDP application is basically the strongest, most correct path. You need someone to help you navigate this.
- The most important things are the following:
- You need to shop around for a CPA. Explain your situation to them, and figure out which CPA makes you feel most comfortable. If you don't have money for a CPA then you need to find money for a CPA, if I am being frank. Find a lower priced one. Maybe just find someone who isn't a CPA but clearly has experience with filing a VDP (Voluntary Disclosure Program) Application.
- You need to start scrounging up records. Find every applicable receipt relating to equipment, purchases, and other expenses relating to earning that income. If you need to email / phone the stores you bought things from to get receipts reprinted, use bank records. If bank records don't go back far enough then contact your bank to get them run. You probably want to find "Use of Home" expenses assume you'd be able to claim them - utilities, rent, property taxes, repairs and maintenance, and so on. If you want an idea of what you can claim look at your T2125. For revenues earned find your statements from Twitch.
- You need to provide those records in an organized manner to the CPA. Organizing them will save you a lot of money on the costs of a CPA. They will quote based on how much work it looks like needs done, and lack of organization means the quote goes up.
- You need to pay attention for CRA mail and try to sign up for CRA MyAccount (if possible). It may not be possible to sign up without a recent return filed (I can't remember). If you get mail to your mailing address, check it. You should contact the CRA (find their phone number using Google) and ensure they have your current address, and ask if they have any un-responded notices. If you get a CPA, they will be able to check and manage your account too (with authorization from you).
- Then, you can start the process of filing. You are not panicking right now.
- It sounds like the CRA has not contacted you, and at this point the only return accumulating more penalties is your 2018 return. If possible, rush to file your 2018 return to save on penalties. You can amend it later if it turns out you missed some records and details. All other years of returns are accumulating interest so you should move to file these sooner than later, but honestly you don't need to panic...you just need to get through this and file.
- Only after you file can you call the CRA and work out a payment plan. If you cannot pay the amounts due immediately they will be happy to work out a payment plan. The CRA is not evil - they simply want to get paid. They do not want to use their "power" to take your money....so working with them is always in your favour because so long as you meet one of their flexible plans then they don't act aggressive.
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