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“What does CRA see when you file a personal tax return?”
Over the years, I have had many clients want to claim one deduction or another but not both in fear of being audited. The irony of the question often relates to deductions that are grouped together so claiming one vs. another would not necessarily trigger an audit. For example, an employee who mainly works from home but drives to see customers/clients frequently would ask to claim vehicle expenses but not home office or vice versa.
So going back to the question—what does CRA see when you file a personal tax return? Well, very little. They get the line items on the T1 General which summarizes your income, deductions, credits and taxes. But when it comes to deductions like employment expenses, they just get a total of the main categories.
For example, home office would be one number and include all amounts your are claiming such as mortgage interest or rent, utilities, property taxes. CRA would not receive the details of each actual expense. The same goes for your automobile expenses in that they would receive the total but not the breakdown of your gas, insurance, repairs, lease or depreciation. The sames goes for medical expenses or childcare, they would not see the breakdown of every amount or which child you might have spent more in childcare on.
The point of sharing this client question/concern is to not be afraid to claim a deduction that you are entitled to out of fear of audit from CRA. As long as you keep the supporting documentation for the claim, the audit process will be much smoother and painless for you, your Accountant and CRA.
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***This blog is for information only and not to be used as tax advice or planning without first seeking professional advice. Information is subject to change without notice.