T4

[geekgirly]

Not sure if this is the correct place for this question, but since this is happening now that I am retired I though it might fit here.  So I just retired at the end of February (26 February).  I have my T4 from 2019 to file my taxes however, I have noticed that my Employment income is more than over $10k of what I actually made last year.  I retired as a Incentive 6 Lt(N) - gross $8058/month. There is also a pension adjustment of over $13k.  When doing to calculations for my tax return it seems that I owe $4k!  I expected to be paying the CRA for my 2020 taxes as I will be receiving my severance in full in a couple of months or so, but I wasn't expecting nor planning to have to pay for last year's taxes.  None of it really makes any sense. 

Has anyone else been hit by a big tax bill after retiring early in the year (January - February)? Thanks

 

[dapaterson]

Potential reasons: Did you move last year?  If you moved from, say, Alberta to Nova Scotia, your income tax deducted at source will be too low for NS unless you changed it on posting.  Did you receive any relocation benefits that are taxable in your hands?  For example, I believe only the first $15K of home equity assistance is tax free, the remainder is taxable ( and will show on your T4 as income).

Did your family situation change (divorce, kids turning over 18 and no longer in school / living at home?

 

[BC Old Guy]

There is also a pension adjustment of over $13k. 

Assuming you are pulling info off the T4, the Pension Adjustment should not affect your taxes - it affects how much you can put into an RRSP.

Drop me a PM if you want to discuss further.

BCOG

 

[geekgirly]

Potential reasons: Did you move last year?  If you moved from, say, Alberta to Nova Scotia, your income tax deducted at source will be too low for NS unless you changed it on posting.  Did you receive any relocation benefits that are taxable in your hands?  For example, I believe only the first $15K of home equity assistance is tax free, the remainder is taxable ( and will show on your T4 as income).

Did your family situation change (divorce, kids turning over 18 and no longer in school / living at home?

I was posted to Ottawa from an OUTCAN posting in 2018.  No change in family. 

 

[dapaterson]

Did you take an IPR move in 2019?  I'm trying to think of other things that could make additional money appear on your T4...

 

[ballz]

I was posted to Ottawa from an OUTCAN posting in 2018.  No change in family.

So you were in Ottawa, and remained in Ottawa, and lived and worked in Ottawa for all of 2019?

Did you have any allowances during this time? Unlike your pay stubs, these would be lumped into employment income on a T4. I.e. spec pay, jump pay, LDA, clothing allowances, spec ops assaulter, etc?