UNMASKING CRA – 5 FACTS TO MANAGE YOUR CRA FEARS
I’m sure this won’t come as a big surprise to many, but I’m a big Harry Potter fan. Truth be told, give me most series shelved in the “young adult” section of the bookstore and I’m sold…” young” must be a state of mind. I remember being so excited to read Order of the Pheonix poolside on my honeymoon…don’t worry we did do more than that ;). The magic and immersiveness of this world was engrossing. And what I loved about the stories and characters was their fierce determination to face and conquer their fears.
Nothing epitomized this more than the Riddikulus spell…for those of you that don’t know, this spell turned your biggest fears, into a joke. A deadly snake becomes a jack-in-the-box; a giant hairy spider suddenly has rollerskates; and – maybe more relevant to you – CRA becomes a box of kittens playing with a ball of yarn. (See what I did there?)
While I don’t have a magic wand and can’t transform CRA for you, I can provide a bit of context to “kitten-fy” this seemingly ominous government agency.
They aren’t the Soprano’s
I know they can seem pretty intimidating, and when they want their money, they want it now, but I promise you, there’s no other resemblance to the Jersey mob boss than that. There will be no broken kneecaps, beatdowns, 20 points weekly interest, none of it.
Now truth be told you WILL get charged interest on money you owe them – currently its at 8% - but its not 20%+ charged weekly! AKA – you’re not going to drown in interest costs; it will suck, but it won’t sink you. The other fee you may be charged is a late filing fee or failure to file penalty. As you might suspect, they charge you this when you don’t file things on time. These can add up as well but again, nothing that you can’t recover from.
My approach is – even if you can’t pay your taxes, file them on time. You’re still going to get charged ALL the interest you owe from the date it was due, but if you don’t file it for a year or two, the penalties are going to REALLY suck. I’d rather make installments towards what I owe than be stuck with a bigger bill a year from now!
Now on the subject of installments, let’s talk about this…If you’ve got a tax bill that you can’t pay in one lump sum DO NOT STRESS! Its ok. Yes, you’ll get charged interest, but hey, so does your credit card; you’ll survive. Pay what you can, when you can, and clear the balance. There are two ways to do this:
Just make regular/consistent payments on your own
Call them and come up with a payment plan
They’re both basically the same thing, but in #1 you’re making the decision to pay and when; in #2 they can often set up an automatic payment for you so you don’t have to think about it. Kind of like setting up auto-pay for your mortgage or phone bill, it makes sure your payments are on time and you don’t have to think about it. I’ve found that the payment team at CRA can work with you to get your payments to a manageable monthly amount and over a reasonable period. Don’t get me wrong, you don’t have forever to repay them, but they’ll work with you and your situation.
Real people
I know it’s easy to imagine the people at CRA as evil government warlords with sinister theme music and ominous cackles. The truth is, though, that the people answering the phone when you call are actually just normal people. In another life, I could have been one of those people. They’re innocent public servants doing their best to get you answers to some of the issues and questions that cause you a ton of stress. I’m fairly confident to say that these are not experts, but they’ve been trained to get you answers. I’m also confident to say that if you’re not getting the answers you need, you can ask to speak to a higher-level agent…this is a real thing. They have “tiers” of agents to help you depending on the complexity of your issue or question.
Now, don’t mistake this to mean that if you don’t LIKE the answers you’re getting, you can just keep asking to speak to a manager…sometimes the answer is what it is and we just have to suck it up. But if you (or they) aren’t confident in the information you’re getting, it’s ok to ask to confirm/check with a more senior agent. Be nice about it (i.e. don’t call them a useless idiot), and while they might feel a bit offended or annoyed, it’s ok – you’re allowed to get a second opinion. After all, it is your money, so you don’t have to just hand it over blindly.
My CRA Online Account
More and more, CRA is eliminating paper/snail mail communication. It’s great, cause tree’s and all, but it does put the onus on YOU to make sure you can “get” your mail. If you haven’t done it already, your first step is to create your login. I put together a quick “how to” doc to help you get this set up CLICK HERE to download it.
There are three types of accounts you can have with CRA – My Account, My Business Account, and Represent a Client.
My Account is for everyone and anyone with a SIN. This is for your personal/individual taxes and everyone needs this access. Here you’ll see the status of your tax returns, get copies of T-Slips for your taxes, see your Notice of Assessment, get info on credits available to carry forward (i.e. capital gains, tuition), or other benefits such as GST rebates, Child Tax Benefits, etc. You’ll also be able to see if you owe them any money and the accumulating interest charges.
My Business Account is for anyone with a business. If you’re a sole proprietor with a GST number and/or payroll, or a corporation you need a business account. In your business account, you’ll see all the info related to your GST filing/owing, payroll remittances, and corporate taxes, as well as those lesser-used business accounts – excise, export/import, information returns, etc. There are so many different reporting requirements with CRA that it’s important you can pop in here from time to time to make sure you’re not behind on anything.
Representing a client is for people like me, to get access to all of MY clients’ CRA accounts – both individual and business. Unless you’re an accounting or tax person, you don’t need this type of account (nor can you get one!).
Open your mail
Whether it’s paper or digital, ignoring mail from CRA does not make it go away. In fact, it can often make it worse. It’s true that most letters from them are basically just confirming that they received info from you, but sometimes it’s REQUESTING more info, or CORRECTING info received…which may require you to send them money or re-correct them! The only way you can deal with them is to open the letter and see what they’re saying. These letters often have deadlines to respond so putting it off is not a good play.
HAHA – and if you can’t get over your fear of CRA mail, get yourself someone like me that can open & read that mail for you! I will often do this and let my clients know what they want; it’s sometimes less scary to hear it from your business-bestie than an official government letter. That might make me an “enabler” but hey – I’d rather you know what CRA is saying than find out a year later when it’s a problem.
Phone a friend
Still, feeling intimidated talking to the reps at CRA? Call for backup! One of the perks of working with someone like me is that you can get us to either call CRA for your or call them with you. I’m a mom. My job is to hold my kids’ hands when they’re getting a shot, advocate for them, or make them feel safe when they’re scared. The same goes with my clients – I will full-on go to bat for them! If you’re needing that support, don’t be shy to ask! And hey, maybe after seeing how easy it is, you might be ready to take the reins on your own.
That’s it! I hope that takes some of the scaries out of CRA. Now go pull those unopened letters out of your drawer and see what they say!!!