Every year when you file your taxes , the Canada Revenue Agency (CRA) reviews your submission and sends you its response. This official response is called the notice of assessment, and it's an important tax document that helps you understand your financial situation and plan for the future. Here, we break down some details you need to know.
There are two types of notice of assessment. The normal one is issued by the CRA a short time after you file your tax return. The usual process is for the CRA to proceed to a cursory review of your tax return. If everything appears to be in order, the CRA issues a notice of assessment. You can think of this as an official receipt that you filed your taxes properly and your tax return has been evaluated.
Later on, your file may be reviewed or your business may be audited. If this happens, don't stress. This is often a routine check and doesn't necessarily mean they think you've done something wrong. If the CRA finds discrepancies, it can make changes to its original assessment and issue a notice of re assessment.
As a rule, the CRA has three years from the date of the first notice to issue a new notice. Note however that this rule has many exceptions, especially in cases where taxes were willfully misrepresented.
All notices of assessment and reassessment contain the same basic information:
If you have participated in the Home Buyers' Plan or the Lifelong Learning Plan, your notice of assessment may also include relevant information on these programs, like how much money you've withdrawn and how much you need to put back into your RRSP.
The most important section is in the centre of the page, which shows the actual assessment of your return by the CRA. That's where you can find detailed explanations of any changes the CRA has made following its review of your tax returns or its audit of your business. It's important to understand these changes and the impact they have on your taxes.
If the notice is in line with your tax return, or if you agree with any changes the CRA has made, there's nothing left for you to do except pay whatever balance you owe or wait for your refund — whichever is indicated on the notice.
However, if you disagree with the notice of assessment or reassessment, you must act quickly. You have 90 days from the date of the notice to file a notice of objection to get the CRA to review your file. You also have a chance to file changes to your return if you realize you left out information or made an error.
The CRA should send you a copy of your notice of assessment, either by physical mail or electronically, depending on your account settings. If you can't find it, it's easy to get a new copy . Just log into your CRA My Account or the MyCRA mobile app, or call the CRA if you'd like a printed copy mailed to you.
When you're on top of your accounting and file your taxes accurately and on time, you're unlikely to see any surprises in your CRA notice of assessment. QuickBooks helps you get your bookkeeping in order to streamline the tax filing process, helping you track income, expenses, and tax obligations efficiently. Learn more about QuickBooks and its benefits for your business.
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