The deadline to file your income tax and benefit return is Saturday, April, 30th. Most Canadian income tax and benefit returns for 2015 are due tomorrow. But since the due date falls on a Saturday, you actually have until midnight on May 2nd to submit your returns.
Why should you consider taking immediate action to make the filing deadline, even if you can’t pay the balance owing for 2015?
CPA, CA, LPA, Partner
Millards Chartered
Professional Accountants
Simon Salole, CPA, CA, LPA and Partner at Millards Chartered Professional Accountants says that the penalties for not filing on time can be costly.
“You should still file your return on time to avoid the late filing penalty. The penalty is 5% of your 2015 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months. If your return in 2012, 2013 or 2014 was assessed a late filing penalty, the penalty for 2015 will be penalty is 10% of your 2015 balance owing, plus 2% of your balance owing for each full month your return is late, to a maximum of 20 months.
But what if you’re not fully prepared?
“The CRA suggests you should still file on time even if some income slips or receipts are missing. Your return may not be perfect but the penalties can add up quickly and so it’s worth your effort to file before midnight on Monday, even if your return is missing documentation and you can’t pay the balance owing for 2015.”
Salole suggests that the best course of action would be to file on time and then consider making payment arrangements with the CRA.
“If you are eligible, a payment arrangement will let you make smaller payments over time until you pay the whole balance.”
Another reason to consider filing your tax return before the deadline is to avoid an disruption in benefits. Failing to file, especially for long periods of time, puts federal and provincial benefits at risk that are calculated based on annual tax returns.
Included in the benefits calculated each summer based on tax returns are Ontario Trillium benefits, guaranteed income supplement, provincial assistance programs and GST and child tax credits.
“The child tax benefit can be a significant benefit for low-income families and so you don’t want to put that at risk by not filling.”
The bottom line is that you should file before the deadline to avoid penalties. The only way you can file late without penalties is if the government owes you money. Even then there is a downside as your refund will be delayed until you file your return.
Do you have a tax filing challenge? Millards tax specialists work year round to help you. Contact us today and schedule an appointment so we can assess your tax situation and help you with the CRA.
Simon Salole’s practice areas include personal and corporate tax planning, accounting and auditing. Simon joined Millards Chartered Professional Accountants in 2001 and was named a partner in 2009.
Reference:
http://www.cra-arc.gc.ca/nwsrm/txtps/2016/tfsk15-eng.html
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/ntrst/menu-eng.html
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