Preparing a personal (T1) tax return

To prepare a personal tax return, you must use DT Max's keyword system in order to complete data entry.

Some of the data are of personal nature and designated as "permanent data". Other data are fiscal in nature and more closely related to the contents and purpose of a tax return.

When adding a new client, tick any relevant options from the SmartStart client outline screen and click Continue. A series of keywords will appear from the section Personal information, followed by the other sections you have ticked from the SmartStart client outline screen. (Please refer to the document titled The DT Max SmartStart input assistant for detailed information about this feature.)

The keywords listed below represent the permanent data and comprise components that are common to all tax returns.

• LastName

• FirstName

• Relation

  Use this keyword to indicate the nature of the relation to the family head, who is the cornerstone of the entire family unit.

  In a typical family unit, there will be a family head, a spouse and any number of children or other dependants. A separate file must be created for each family member. Each child is linked to the family head or to the other financial support (spouse or common-law spouse). Since DT Max optimizes the dependant amounts, the specific spouse to whom a child is linked bears very little importance.

  In the case of an extended family, it is recommended to link a child to his/her biological parent.

• SIN

• BirthDate

• Status

  This keyword should indicate the civil status of the taxpayer as of December 31 of the tax year. For example, if the taxpayer got married during the year, the option Married should be selected under that keyword.

• Sex

• PROV-RES

  This keyword indicates the province of residence of the taxpayer as of December 31 of the tax year. It should not be mistaken for the keyword Province, which is used to indicate the province of the taxpayer's postal address.

• Language

  This keyword allows you to specify the language in which a production return should be printed. This does not prevent you from working on a return and viewing it in the language of your choice.

• Street

• City

• Province

• POSTCODE

• Phone

• Alone

  This keyword must be used in the file of a Quebec taxpayer who does not have a spouse. If omitted, DT Max will generate an error message.

The other keywords required for preparing a T1/TP1 return are designed to process tax information.

• The keyword T4 enables you to enter information from the federal T4 and Quebec RL-1 slips.

• The keyword T-Slip includes the various types of information slips provided to taxpayers by the governments.

• When amounts are relevant to both the federal and provincial jurisdictions, DT Max assumes that the provincial amounts are identical to the federal amounts. If this is not the case, the function key [Alt+J] allows you to enter a different amount, if necessary.

• Among the most common items to consider with respect to personal tax returns are the RRSP contributions and deductions.

  The keyword group RRSP enables you to indicate the contributions paid to a RRSP. When you enter the keyword RRSP :

  1. choose the taxpayer's Own plan or the Spousal plan;

  2. use the keyword RRSP-Contrib to enter the amounts of RRSP contributions;

  3. use the keyword UNDEDPREMIUM to indicate the amount of undeducted premiums for past contributions;

  4. open a second RRSP group in which you will select the option Room & limit to indicate the amount of RRSP contributions the taxpayer can pay.

     This includes the amount of eligible contributions for the current year (calculated according to the income earned for the previous year) and the eligible amounts from previous years that were not contributed (sums which could have been paid to a RRSP but were not), designated as the eligible amount of RRSP contributions. Enter that amount for a new client only or to modify the carryforward from the previous year as calculated by DT Max. This amount should be identical to the amount determined by the CRA.

  5. If you wish, you may use the keyword LIMIT-RRSP to limit the amount of RRSP contributions for the year.

• The keyword Income-Hist is the taxpayer's income history for a given past year. For all new clients, you must enter the history manually. DT Max will automatically generate a history for the following years. This is particularly important for clients who pay instalments.

• The keyword Medical enables you to enter the medical expenses you want to claim for the year. The optimization made by DT Max will allocate these expenses among the family members. The refundable credit for medical expenses will be claimed if a taxpayer is eligible.

• The keyword Donations is used to enter the various types of charitable donations made in the course of the year, whereas the keyword AMOUNT-CF is used to carry forward the amount of donations that were not claimed in past years.

  DT Max will optimize pursuant to the taxable and payable income of each spouse.

• The keyword Drug-Insur should always appear in the file of a taxpayer who is filing a Quebec tax return. If omitted, DT Max will generate a warning.

• The child care expenses should be entered in the file of the child for whom they were incurred with the keyword CHILDCARE . When processing the data for the family, DT Max will give the tax credits to the relevant financial supporter.

  Due to certain exceptions prescribed by law, the keyword Child-Weeks can be used in the file of the taxpayer to whom you specifically wish to allocate child care expenses (usually the individual with the higher income).

• Use the keyword Business to select the category of activities pertaining to the financial data you need to enter for different types of income, such as

  • business (e.g. self-employment)
  • rental
  • commission
  • farming
  • fishing
  • professionnal

Once data entry for the family head is completed, you can create a new file for another member of the family, if any, either by clicking the Add new client icon or by pressing [F3], or by selecting New client in the File menu.