5 essential tax tips for last-minute filers
Haven’t filed your taxes yet? You’re not alone. As of last week, 2 in 5 Canadians still hadn’t sent in their returns, according to a survey by tax preparation company H&R Block.
With a few days and an entire weekend left to assemble your tax documents, though, you can still make it — and you should.
Filing your taxes and doing so on time is always a good idea, even when you don’t owe the government any money, said Gennaro De Luca, founder of TAXplan Canada and senior partner of Redwood Capital Management, a financial advisory firm.
Here are some essential tips for late-filers:
1. The tax deadline is May 1 this year
You’re in luck. The Canadian tax deadline is normally April 30, but because that falls on a Sunday this year, you get an extra day. For most filers, both the tax return and any balance owing are due by midnight of May 1.
Self-employed Canadians have until June 15 to file their return but still need to remit any payments to the Canada Revenue Agency (CRA) by May 1.
2. What to do if you don’t have all of the information
What if you don’t have a key piece of paperwork you need to calculate how much you made last year? File anyway, said De Luca. The CRA won’t grant you an extension except in extraordinary circumstances, such as when you can prove a medical issue prevented you from filing on time.
Instead, file your taxes by deadline with your best guess of your income, said De Luca. You can then file an amended return once you have all the information. If your taxes turn out to be higher than what you paid, you’ll still have to pay interest on the difference. But you’ll be spared the late-filing penalty, which ranges from 5 per cent to 10 per cent of the amount owing, noted De Luca.
You should also keep in mind that the late-filing penalty increases by 1 percentage point for every month you’re late, noted H&R tax expert Lisa Gittens.
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3. File on time even if you’re getting a refund
Take care to file on time even if you’re getting money back, said De Luca. The government won’t penalize you for filing late when it is the CRA that owes you, but sending in your taxes after the deadline still “counts as a strike against you,” he added.
For example, if you file late again next year and happen to have a balance owing, you’ll be given a higher late-filing penalty because you’ve missed the deadline before, De Luca warned.
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4. Another reason to file by deadline: government credits and benefits
It’s pretty obvious why you’d want to file if you need to pay tax or expect a refund. But what if you made nothing at all last year?
“You should file — especially if you don’t have income,” said De Luca.
That’s because the government will use your tax return to assess whether you qualify for any provincial and federal credits, he added. If you didn’t make any money last year, chances are high you do qualify, noted De Luca.
Not filing could result in your family missing out on the Canada child benefit, too, as both parents need to declare their income to be able to receive that, Gittens told Global News.
In general, filing late or very close to the deadline can result in delays receiving government benefits and credits such as the GST/HST credit, Gittens added.
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5. It’s not too late to get help from a professional
You can show up at H&R Block as late as Monday and “definitely” still get help, said Gittens.
However, many mid-sized tax preparation firms are already turning away clients, noted De Luca. For last-minute assistance, your best best is to go small or go big: Pick a tiny firm or a giant one, he said.
Even at H&R Block, though, you might run into trouble by leaving your taxes to the last minute. If you’re missing any documents, you might have to file without claiming all the credits and deductions you’re entitled to, said Gittens. You might then have to request an adjustment after the deadline, once you’re able to locate your papers, she added.
That’s why doing your taxes comfortably ahead of the deadline is always a good idea.
“If you wait too late to file, you’re really hurting your pocketbook,” Gittens said.
© 2017 Global News, a division of Corus Entertainment Inc.