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So I have written a few blogs that discuss receipts and documentation. In every one I have said never, never, ever send the CRA original documentation.
The CRA employs a number of ways to select an income tax return for review. It could be by random selection or comparison of information returns to information received from third-party sources or types of deductions or credits claimed and an individuals review history.
The amount of the tuition or education tax credit used by the student is calculated before the dividend tax credit is deducted. Because of this, it is possible that no transfer of tuition or education amount will be allowed if a student has significant Canadian dividend income, even though the student may not need the entire tax credit. When calculating the tuition or education tax credit, the result may be that the entire tuition or education amount is utilized, but not the entire dividend tax credit. And any unused dividend tax credit cannot be carried forward.
If we break down the T1 Personal Income Tax Return, we will find that there are only a few sections that we need to know and understand about this form. The most important pages of the income tax return are the T1 jacket (4 pages) and the Federal and Provincial Tax Credit Schedules.
