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Can money paid from PST audit be claimed for income tax?

Expert: John R Mott

Paige asked:

How do I claim money paid from a PST audit on my income taxes? The money was paid out of my pocket since the PST was not collected. I'm located in Ontario.

John R Mott answered:

It appears that the provincial government determined that you should have been collecting PST from your clients. Any amount that you were assessed for provincial sales tax and related interest and penalty charges is not deductible for tax purposes. You would not report this amount at any place on your tax return. You of course have the option of pursuing your clients for the PST that you should have charged them, but this may not be the best business practice.

About the author

John Mott is a chartered accountant and tax specialist with a private practice in mid-town Toronto. He provides tax, accounting and advisory services to individuals and small businesses. He may be visited online at:

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