How to Change Your Tax Return by Filing a T1-ADJ Online Using Your CRA My Account

Posted on 2014 05 30 by BetCrooks

Well this has been a major year for tax errors in the clan. First I discovered I’ve been reporting an incorrect business code for over 10 years. Then another relative discovers (admits?) he has some T2125s from some continuing education certificate courses a few years ago that he never claimed. I helped him out by showing him how to change his tax return by filing a T1-ADJ online using the CRA My Account website.

First he had to apply online to get a CRA Security Code and wait for it to arrive in the mail. That took about 3 days. Now his CRA My Account is fully set up so he can start using it.

NOTE: His tax returns have all been assessed and he has received his Notices of Assessment. You generally do NOT file a T1-ADJ until after they have processed your return. If you mail or e-file it too soon you will likely cause the entire Revenue Canada computer system to crash to its knees and start coughing out audit letters. Please restrain yourself from invoking mass audits on yourself and your colleagues and wait for that Notice of Assessment!

Save Yourself Some Tax Penalties

If you know the correction you need to report means that you will owe the CRA money, PAY IMMEDIATELY! The sooner you pay, the more successfully you can appeal to have any fines or penalties waived. If you wait to pay the government is not as likely to look kindly on your request for forgiveness.

What Years Can I Correct Online?

In 2014, you can ask for corrections to your tax returns for 2004 to 2013. (You won’t file your 2014 taxes until spring 2015.)

How to Adjust Your Tax Return Online Using CRA My Account

To sign in to your My Account website

Go to http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/myccnt/menu-eng.html
1. Click on the CRA Login button.
2. The CRA Login Page
3. In the User ID: field type in your id.
4. In the Password: field type in your password.
5. Click on the Login button.

The Additional Security Feature Page
Type the answer to your security question and click on the Continue button.

The Last CRA Login Page
Check the date and time of your last recorded login. If it’s ok, click on the Continue button.

The Welcome Page
Now you are in your main CRA My Account home page.

Click on the link on the left side of the screen called: Change my return

The Change My Return Page
Read the information on this page about adjusting your tax return. If you are not sure you can request the required change this way, click on the link to Help with this page and read the information there.

From the drop-down list, select the year for which you wish to change your tax return.

Click on the Go button.

The T1 General 2013 Page

Click on the tab for the form or schedule you need to change.
For example, to add an amount for eligible tuition fees, click on the tab: Federal tax SCHEDULE 1
In this case, nothing had been reported previously for tuition fees.To add a line, in the Other lines for Federal tax: section, from the Select a line drop-down list, click the down facing arrowhead and select the needed line.We selected:
323: Tuition, education, and textbook amounts
Then click on the Add line button.
When that was done, a new line was added to the web page. It stated:
To revise line 323, refer to schedule 11.
We clicked on this new link to schedule 11.
The web page refreshed and added a mini Schedule 11 with lines 320, 321, 322 and 327.
We typed in the appropriate values in the New Amount fields.
NOTE: This did NOT change the value of 0 in the new line 323. That’s because 0 is the value submitted on the original tax return. It should not change at this point.
We then scrutinized the entire web page carefully to make sure everything else looked ok.
When we were sure it looked ok, we clicked the Review and Submit Changes button at the bottom of the web page.

Argh. It says “The new amount in line 320 must be a whole number only (no decimal.) So why does his T2022A have cents on it!

Anyway, we removed the cents and tried again. (Huh. No credit for that 37 cents!)

Ah, this time it progressed.

The Review Changes Page
We read the information about errors and warnings, then clicked on Continue.

The Warning(s) Detected! Page
We claimed tuition costs but not any education or textbook amounts and we did not transfer any amounts to a spouse or a parent. This screen just asks us to confirm that we didn’t want to make any of these related changes.

We read through it, then clicked on the Continue button.

The Submit Changes Page
The system responded with a summary of the lines we had changed and their past and present values.

If you need to change something else, click on the link Make More Changes to go back to the T1 General 2013 screen.

We thought we needed to add the tuition amount to his Ontario tax return. So we clicked on the tab: Provincial tax ON428

The Provincial Tax ON428 Page
Again, there was no line 5856, so we had to add it.

To add a line, in the Other lines for Provincial tax: section, from the Select a line drop-down list, click the down facing arrowhead and select the needed line.We selected:
5856: Tuition and education amounts (provincial/territorial Schedule S11
Then click on the Add line button.
When that was done, a new line was added to the web page. It stated:
To revise line 5856, refer to schedule S11.
We clicked on this new link to schedule S11.
The web page refreshed and added a mini Schedule S11 with lines 5914, 5916, 5918 and 5920.
In the Eligible tuition fees paid section, it states: To revise line 5914, refer to line(s) 320.
So we clicked on the link to 320.
This is the line we have already corrected on the federal return. So the CRA system will apparently automatically adjust the provincial Eligible tuition fees paid based on the correction we have already made to the Federal tuition fees paid.

That means we’re done in this section.

We then scrutinized the entire web page carefully to make sure everything else looked ok.
When we were sure it looked ok, we clicked the Review and Submit Changes button at the bottom of the web page.

We read through the Certification Statement and clicked to check the box to acknowledge the statement.

We clicked on the Submit button.

The Thank You for Submitting a Request to Change Your Income Tax and Benefit Return Page
We were informed his request had been accepted and that he would receive his Notice of Assessment within the next two weeks.

Cool! He’s due to get a small tax refund! It says how much.

If he owed taxes, he could use this reported tax difference to immediately pay his taxes owing. That would strengthen his case to request the CRA waive any interest or penalties.

Exit the My Account Website Safely
Since now he just has to wait, it was time to sign out of the My Account program.

Click on the Logout button.
Click on the Exit button.
Empty your cache and close your Browser session for increased security.

Related Reading

Join In
Have you filed a T1-ADJ to revise your taxes online? Did you get a whopping refund or have to pay a nasty penalty? Please share your CRA stories with a comment.

How Can I Check What the Government Thinks Were My TFSA Contributions and Withdrawals?

Posted on 2014 05 28 by BetCrooks

It’s not unusual for people to have TFSAs (or RRSPs) at more than one bank, trust company or financial institution. I strongly recommend that if you do, you should keep careful track yourself of your contributions and withdrawals from your TFSA. And just like checking your credit rating once in a while, it doesn’t hurt to check what the government thinks you’ve contributed to and withdrawn from your TFSAs; here’s how.

Why Should You Care What the Government Thinks You’ve Done With Your TFSA?

In an ideal world, you wouldn’t need to care what the tax department thinks you’ve done with your TFSA. Life isn’t always perfect though.

Here’s an example: A couple of year’s ago, a major discount brokerage had a computer glitch that sent incorrect TFSA info to the CRA. Basically, it reported people as having made contributions twice the size of their actual contribution because it reported each contribution twice. When the CRA computer ran some routine looking for over-contributions, it found these accounts and mailed out letters to the owners telling them they owed whopping fines for their over-contributions. It all got settled without anyone having to pay a fine on money they didn’t contribute but it was still a hassle.

Here’s a possible scenario: Say you have a TFSA at one bank or brokerage but after a few years you withdraw the money December 31 and deposit it elsewhere January 1 and life goes on. Almost two years pass and the CRA sends you a letter saying you have over-contributed which you know is wrong. You decide to print out your TFSA statements to prove it and then realize with a sinking feeling that you can’t get access to those e-Statements anymore since you don’t bank with that institution anymore. And your hard drive crashed with your only e-copies. Now you have to contact a bank you don’t have a “relationship” with any more to ask them to try to get you those archived e-Statements. Sound fun? Not to me. If you’d checked your government TFSA report you might have been able to correct the mistake more quickly or with less hassle.

What Penalties Does the CRA Inflict for TFSA Mis-Management?

Have you ever wondered who invented nitroglycerine or who discovered rhubarb leaves and roots are poisonous but the stems are edible? Those people are cousins to the ones who experiment with every new type of government tax-minimizing-deferring-and-deleting policy. As a result of people stretching TFSAs way beyond how they were intended to be used, the government has instituted some fairly nasty penalties for mis-using them.

If you over-contribute, deliberately or not, to your TFSA, the government can charge you a fine of 1% per month on the over-contributed amount.

For example, if you over-contributed $2000, they can charge you $20 per month for each month the money stays in there. So if you put it in April 30 and withdraw it May 1, they could charge you $40 unless you could prove it was not intentional and they decided to be nice and waive the fine.

If you leave $2000 in for 12 months, they can charge you $240.

Some people were quite willing to pay $240 a year if they could invest $2000 and not pay any taxes on the profits. So the government tightened its grasp again and passed a rule permitting a fine equal to the amount of the ENTIRE profit generated by the over-contribution.

That’s right, you could get billed the $240 fine PLUS they could take every cent of profit made on that $2000 investment. So by over-contributing you would pay more in tax than if you just invested in a non-registered account, and in fact you would lose money not make money.

If you do find you’ve accidentally over-contributed

withdraw the extra money immediately
write a letter to the CRA immediately explaining what happened and requesting forgiveness for this one-time mistake

How Up to Date is the Government’s Info on TFSA Contributions and Withdrawals?

The government data is updated when the banks, credit unions and other financial institutions send in their reports about TFSA contributions and withdrawals.

So generally the government information is only up to date as of December 31 of the previous year by about April of the current year. In other words, in May 2014, my data is only up to date as of December 31 2013. My contribution made on January 1 2014 is not reported in my CRA My Account yet.

According to the CRA website: “By the last day of February of the following year, all issuers are required to electronically submit a TFSA record to CRA for each individual who has a TFSA.”

This record includes the dates and amounts of all TFSA contributions or withdrawals for the previous year. For example according to the CRA website, the record could include

a transaction date and the TFSA contribution amount
a transaction date and the TFSA withdrawal amount
a transaction date and the marriage breakdown transfer out amount
a transaction date and the marriage breakdown transfer in amount
a transaction date and the fair market value of an acquisition of a non-qualified investment
a transaction date and the fair market value of a withdrawal of a non-qualified investment
the date of death of fair market value of the assets at death

How to Check the Government’s Record of Your TFSA Contributions and Withdrawals

The easiest way to get this information is to join the CRA My Account service. It takes a bit of time to get access (about 3-5 mail delivery days) but it works.

If necessary apply for a CRA Security Code online.

When you receive your code in the mail, three to five mailing days later, sign in to your personalized CRA My Account.

Once signed in, here’s how to check your TFSA transactions.

Click on the tab entitled RRSP and savings plans.
Click on the link: Tax-Free Savings Account (TFSA)
Click on the link: Transaction Summary
Read the information, then click on the Continue button.

The TFSA Transaction Summary Search Screen
To see all of your transactions (withdrawals and contributions) at all banks and institutions since the plan began, leave the drop-down lists at their default settings of

all financial institutions
January 2009
December 2013

And click on the Continue button.

The TFSA Transaction Summary Screen
A neat table will be displayed listing your contributions and withdrawals first by financial institution and then by date.

I’d forgotten I withdrew $205 accidentally in 2009 till I looked at this table. (I waited till January 1 2010 to put it back in so it never caused any problems with the CRA.)

If desired, highlight and copy the information and paste it into a document for your files.
When you are finished reviewing your information, click on the Logout button.
Click on the Exit button.
For improved security, clear your cache and close your browser session.

How Can I Get my Government TFSA Transaction History Corrected?

As the people whose brokerage mis-reported their TFSA contributions found out, to get the government records corrected, they had to get the brokerage to submit the correction to the CRA.

If you find an error in your TFSA contributions or withdrawals, you must get your TFSA “issuer” to send an “amended record” to the CRA to update their records.

You can certainly contact the CRA and tell them what’s wrong and what you’re doing to get it fixed. They may or may not add a note to your file. But, unfortunately, you must get the bank or financial institution to send in the correction; you can’t just get it corrected by writing the CRA yourself.

What Will the Government Do If I Over-Contributed?

Generally, the CRA will send you a letter and a TFSA return and payment package if you over-contribute to your TFSA. The fine starts the day you over-contributed, though, not the day they advise you of the problem. So if you know you have over-contributed, get the money out immediately!