Disclaimer: the information provided here is intended to provide general guidance only: ProFile and it’s support agents cannot provide any tax-related advice or opinion.
We recommend reviewing the CRA website and contacting their tax inquiries line or consulting an accredited CPA firm for information regarding current tax laws.
We also recommend having any return prepared or reviewed by a professional accountant before filing.
ProFile includes an in-product training module that walks users through the basic process of creating a T1 return.
You can access the training by selecting the applicable module (for example, T1/TP1) from the “Training” tab in the top toolbar:
The training module opens in ProFile:
As you proceed through the training, you’ll see examples of how to fill out a return and the requirements for the basic forms:
In addition, the following resources are available for assistance 24 hours per day:
F1 Help – press the “F1” button on your keyboard any time you are using ProFile for the in-product help tool. You can search for keywords or browse for topics and information.
ProFile Support Community – visit our online community to review hundreds of support articles, how-to questions, and questions from other ProFile users.
Before getting into your tax workflow, we recommend reviewing the guides below to have a better understanding of Canadian income tax rules. This will allow you to take on the right clients and assist you in growing both your tax knowledge and practice.
CRA T1 guide
Stating with reviewing the CRA Federal T1 guide here. The T1 guide covers topics including but not limited to:
- what’s new for this tax year
- who needs to file a return?
- due dates, penalties and interest fees
- gathering required documents
- which tax package to use
- step by-step guide on how to complete each section of the jacket with details on the meaning and tax rules for each line
- how to send the return?
- assistance with completing a return via phone or in person
Keep in mind that federal and provincial have their own tax rules as well and also may differ in the application of the same tax credit. We recommend reviewing the income tax package for the province you live in and others if you plan on working on tax returns for residents of different provinces. You can find the tax packages here.
Sample information for Residents of Ontario guide here covers topics such as:
- what’s new for Ontario
- Ontario credits
- Ontario Trillium benefit
Other CRA guides
The CRA has many other guides addressing the specifics of certain tax credits and detailed outline of how to complete certain tax forms like business statements. To learn how to complete more complex returns, it is recommended to review the guides below:
- T4040 RRSP
- T4079 T4RSP and T4RIF guide
- RC4064 Disability
- RC4065 Medical Expenses
- P113 Gifts and Income Tax (donations)
- P105 Students and Income Tax
- RC4188 What you should know about Audits
- RC4417 Taxpayer Bill of Rights
- T4055 Newcomers to Canada
- T4058 Non-Residents and Income Tax
- T4144 Electing under Section 216
- T4145 Electing Under Section 217
- T4155 Old Age Security for Return of Income Guide for Non residents
- T4011 Preparing Returns for Deceased Persons
- T4015 T5 Guide Return of Investment Income
- T4002 Self-employed, Professional, Commission, Farming and Fishing Income
- T4036 Rental Income
- T4037 Capital Gains
- T4044 Employment Expenses (T777,TL2, T2200,GST370)
- T4163 Guide for Discounters
- T4115 T5007 Guide – Return of Benefits
- T4091 T5008 Guide – Return of Securities Transactions
…and many others can be found here, listed by number.
As you acquire clients, a tax workflow will help you better organize the workload during tax season. We recommend a basic seven-step tax preparation process to help you manage your practice:
- Gather client data via Hub
- Organizing client data
- Data input
- Initial review of input
- Tax analysis and planning
- Final review
- Transmission to CRA
The most-effective way to gather client data is through an engagement package that includes an engagement letter, a checklist, and questionnaire. This package will serve to provide the majority of client information that you’ll need to file with CRA. ProFile offers this engagement package via Hub, it’s in-product engagement service that streamlines client communication and tracks interactions and submissions.
An engagement letter will outline the scope of your services for your clients. ProFile provides a sample engagement letter you can use on the form “Engage”. It can be customized to your liking and needs.
A questionnaire and checklist will answer many questions for you, especially if it’s a new client. ProFile provides default questionnaire and checklist which can be adjusted to your practice. Using a checklist and questionnaire will save you and your client time and reduce back-and-forth communication. The questionnaire will help you find about any changes for the client such as an address change or marital status change (as well, they may have had children this year or new family members living with them). There can also be financial changes like a taking on a new loan, new job, or new investments.
T1 engagement letter in Hub
The engagement letter is the initial communication sent from ProFile via email. It provides you the opportunity explain your expectations to the client, as well as explain the process of gathering their data. The engagement letter can be customized to each client as needed:
Questionnaire in Hub
The questionnaire gives you the ability to create unique and customized questions for your client. In addition, you can pre-set answer options (for example, “Yes/No”) to streamline incoming client data:
Checklist in Hub
The checklist allows you to create a list of items that the client needs to provide you in the course of your completing their return. This is a convenient way to explain exactly what you require from them all at one time:
At this point you will have a great deal of client information at hand, which means that it’s time to get organized. The task now is to take all the paperwork, separate the tax information, and make organized piles for input.
Keep in mind; you will have all type of clients. You will have organized clients and less organized clients. Some may email you everything at once, others will email you in bits and pieces of information here and there. It is your job to stay on top of your email and make sure the data is getting organized properly in the correct folder for input. Other clients may drop by with a big shoe box filled will all sorts of items that you have to organize.
What we recommend doing is initially taking the shoebox a client drops off and organizing them into smaller more manageable piles. The shoebox may contain slips for all members of the family with various receipts like medical, donation and so on. You want to organize all slips by individuals, and make a pile for each spouse and dependents. While you are separating the paperwork, also organize them so that it’s easy for entry. You want the identification on top of the pile followed by slips income and so on matching the form explorer in ProFile for easy entry.
Tip: use the memo feature in ProFile to keep track of pending communication with clients (for example, a memo on donations form if the client is pending sending you the receipt). Use the calculator field to add slips like medical slips.
Now they you have organized the income and deductions like RRSP and T4 slips for all members of the family, create a joint pile. These are items the can potentially go into any spouse and you will need to determine which one they belong in as you start entering into ProFile. These include items such as medical, donation, tuition, childcare and so on. The child care will be determined by lower income which you will find out as you start inputting into the software. The client pay also provides organized piles to you for various credits such as public transit, caregiver, or disability credits.
Do not assume that clients qualify for any credit. Always review the eligibility requirements for these credits on the CRA website.
We recommend getting the T1013 printed and signed in order to automatically import information using the CRAs auto-fill my return (AFR) feature. AFR quickly pulls in the slips and carry forward information into the return for you.
Continue with other information the client not captured by the AFR feature. Use the Form Explorer in ProFile to work your way down in different sections of the tax return:
It’s always a good idea to have someone else review the return once all data has been entered, in order to ensure accuracy and good practices. Use the Preparer sign off feature in ProFile on amounts entered, and review the internal auditor for any outstanding issues.
Tax analysis and planning is rarely “cut-and-dry”; it requires experimentation and undertaking different scenarios to determine the best option for clients.
Review the Comparative form and the Business Comparative form in ProFile and deep-dive into optimizations between family members for the best options. In addition, plan with clients for the next tax year using the Planner.
Time for the final review of the return prior to transmission to CRA. Have someone review return after tax planning for any issues, and review the auditor tabs for any lingering errors.
In preparation for a client discussion, print any slips and the Comparative form to assist in explanations and to assist with client questions.
Gather the necessary elements of client consent, including the following:
- T183 printed and signed prior to transmission via EFILE
- T1 Jacket
- additional signature for pre-authorized debit (PAD)
- T1135 printed and signed, if required
- Any additional forms signed, if required (for example, T1A, T1032, etc.)
Transmission of the completed return can either be electronically (via EFILE) or paper, by mailing the return or form to one of the CRA offices. In addition, ensure the T1135 form is transmitted.
As final pieces of housekeeping, print the return for the client and mark it as “completed” in ProFile.
Send the client your invoice, and confirm with them when payment is received.