T1 review notes

A few items I noticed in TC 2021

  • T3 slips have a field to enter management fees. No alert shows up if no amount is added currently, but there is a PY amount.
  • No CRA AFR alert for T4A Box 205 with no amount in CY field
  • T4A - Fee for service
    • Transfer directly to Line 13500 / 13700 – Filing deadline indicates end of April
    • Transfer to T2125 – filing deadline indicates June 15
  • Vehicle expenses
    • If there are lease costs, no alert is needed on the CCA class field

Is there any way to have the filing deadline for the current year mirror the prior year? I run a report showing CY returns by filing deadline. Unless I go into each tax return (not yet received) with a business statement and add $1 to revenue, they all show up as due April 30. I understand this request is based on the assumption that the client is still in business in the CY, but that is not unreasonable, especially if the PY was not flagged as “closing business”.

If you mean you are creating the T3 slips, I can’t comment on that one as I don’t provide that service to my clients. If you are looking for an alert on a T3 slip received, what could you do about the alert? You can’t assume there was a management fee and put one in as you are not the slip provider = no alert required. If your client has statements that show a management fee was paid, it can go on Schedule 4

No CRA AFR alert - if it did alert on it, what could you do? You can’t enter it in as you are not the slip provider = no alert required

T4A transfer of amounts as you’ve noted above is correct.

Lease/CCA alert - it depends if the lease is an operating lease (no CCA) or a Capital lease (CCA taken, not the lease expenses)

The filing deadline on a t2125 is not always June 15th. If the business closed in the year, the taxpayer is not considered self-employed, so reverts back to April 30th

I have never heard that the dead-line for taxpayers who close their business during the year is Apr30th.
Do you have a link for that?
It doesn’t seem reasonable to me if I close my business on Nov 30 I now have less time to prepare my taxes.

Also, normally, a lease is a lease is a lease for tax purposes.
A capital lease for F/S purposes should be recorded as an purchase, but still reported as a lease on the tax return.
Only if you agree with the vendor can a lease for tax purposes be deemed a purchases: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses/leasing-costs.html

So I think that Gil is right that there should not be an alert for CCA if lease costs are entered.

This request has nothing to do with the generation of a client T3 slip.

Some T3 slips provided by the client report management fees in the “foot notes” area on the slip. These fees can be entered on the TaxCycle T3 slip screen. See below. Amounts recorded here are automatically transferred to S4.

As this amount does not come down through AFR, there is can be no AFR alert. However, if an amount was recorded here in the prior year, then perhaps there should be an alert to that situation. The alert shows up in other similar instances (no value this year/value recorded last year).

Regarding the lease amount, if there is a lease (operating), then there should be no CCA. In this situation, TaxCycle has an alert to the CCA field.

Regarding the April 30/June 15 filing deadline, my intent was to point out that if a T4A Fee for Service amount is transferred directly to the T1 Jacket, the TaxCycle calculated filing deadline is April 30. If the amount is transferred to a business statement (i.e. T2125), the calculated filing deadline is June 15. Should they not both be the same, regardless of how the amount is handled?



Thanks for pointing this out. I hadn’t noticed that was added on the T3 slip data entry tab.

I would guess it must have been just this year it was added and maybe even just recently? or maybe I am just getting less observant.

Alert would be welcome and save on another memo to be added. If the field was just added there would be nothing to alert us to for this year but going forward would be nice.