It’s truly surprising how many people are behind in their tax filing obligations—for multiple years in some cases, it seems. This could be particularly expensive, unless they know about and take advantage of Taxpayer Relief provisions. The tax year 2000 is the one to watch for now, as December 31, 2010 is the last day allowed for adjustments to that return.
Yes, that’s right. It is possible, to reach back to recover errors and omissions on federal tax returns for up to ten prior years. Such a proactive stance could obviously help taxpayers recover many thousands of dollars in missed tax overpayments and refundable tax credits.
However, filing prior missed returns can also help taxpayers build important “contribution room” for Registered Retirement Savings Plans (RRSPs) and Tax Free Savings Accounts (TFSAs). It can also ensure that capital losses, which can offset capital gains in the future are recorded, and carry over provisions for charitable donations, tuition and education amounts or student loan costs are available for future use.
Remember, it’s your legal right to prepare your return to your family’s best tax benefit by digging for every tax deduction and credit you are entitled to. This includes filing missed prior returns or adjusting for errors or omissions on prior filed returns, which can bring additional tax refunds to your door.
And that would be an excellent Christmas present to yourself, don’t you think?