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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Audit


Synonyms:analysis, balancing, check, examination, investigation, scrutiny, verification, view
Filed Under: financial-banking, legal-contracts, taxation
Tags: banking, contract, legal, taxes
 

Definition of audit

audit
1. An examination by Revenue Canada of a taxpayer's return or other transactions that have tax consequences. Audits range from a simple letter from the agency to a detailed review of individual or business tax filings and records.

Related Terms and Acronyms:

  • assessments   Special and local taxes imposed upon property which benefits from an improvement that has been made in the vicinity.
  • constructive receipt   The idea in which a taxpayer does not actually have to take possession of money for it to be taxable. An example of this is when savings account interest is reinvested rather than sent to the account holder as a separate payment. In this case, the account holder constructively received the interest because the earnings were credited to his account and could have been taken out at the owner's discretion. As such, the earnings are taxable.
  • filing extension   An additional amount of time to file your return. A filing extension, however, does not give you more time to pay your taxes.
  • income tax   The main source of revenue for the federal government and many Provinces. The tax is based on your earned and unearned income. The amount or percentage taxed is based on the amount of income, using the governments graduated tax scale.
  • income-splitting   A financial strategy used for tax purposes to reduce the overall tax burden on a family. Income is shifted from one family member to another who is in a lower tax bracket, so the income is taxed at the lower rate to save the family money.
  • net income (NI)   The difference between effective gross income and expenses. The term is qualified as net income before depreciation and debt.
  • not-for-profit   An Organization operated solely for: social welfare, civic improvement, pleasure or recreation, or any other purpose except profit.
  • Notice of Assessment (NOA)   A form the federal government issues when personal taxes are complete. A notice of assessment shows a breakdown of the given years income along with the balance owing or refund.
      ➥  Canada Revenue Agency's T451 tax form.
  • taxable income   Income that is subject to taxation after accounting for adjustments, exemptions, and deductions.

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