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Tax

Offshore pensions, assets among biggest tax filing errors

There are a number of mistakes Canadians often make when filing their taxes, but one of the most common is forgetting to declare an offshore pension, Toronto tax attorney David J. Rotfleisch tells Tangerine’s Forward Thinking website.

“People from the U.K. come to Canada. They know their U.K. pension is tax-free, and they don't realize they have to declare these payments as Canadian pension income even if they haven't received a T4," Rotfleisch, founding tax lawyer at Rotfleisch & Samulovitch Professional Corporation, says in the article.

“Then I go back and discover they may not have claimed it for 15 or 20 years,” he adds.

As Rotfleisch explains, another category that is often poorly understood by taxpayers is offshore assets valued at more than $100,000.

“If you have a Florida rental condo, a U.S. stock portfolio or a Swiss bank account, you have to report details of the asset, capital gains or interest income from that asset on a Form T1135 and pay taxes on that income,” he says.

He also notes that all income must be reported, even casual or Internet-based income.

“A hobby that turns into a business is a very common situation for many retirees. If you make bread boards and sell them at farmers' markets, you can deduct all your expenses, but you still have to report the income,” says Rotfleisch.

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