April 30 has come and gone, and we accountants have survived another personal tax season in Canada. But we’re not done yet – the deadline for self-employed individuals is June 15, and some other taxpayers may not have been concerned about meeting the April 30th deadline.
Taxpayer: I know I’m getting a refund (or don’t owe any tax), and I haven’t filed my return yet. Do I still need to file my tax return?
YES! Here’s why:
1) Your refund is your money…as long as you don’t file your income tax return to claim that refund, and it’s sitting with the Receiver General, you’re giving them an interest-free loan with your money. Also, note that CRA has limitations on how far back they can issue refunds. The CRA will only issue a refund if you file your tax return within 3 years of when it is due (i.e., by April 30, 2018 for your 2014 income tax return). For returns with refunds owing beyond that time (up to 10 years late), you may still get your refund (or at least have it applied to taxes owing in other years) under certain circumstances and only if you apply for relief (but this is not guaranteed and up to CRA’s discretion).
2) If it turns out that you OWE taxes (either you miscalculated or CRA finds adjustments), the penalty for late-filing is 5% of the balance due, plus 1% per month that is late, plus interest. For repeat offenders (you filed late more than 2 years in a row), the penalty can be double. That’s a huge risk to take for not filing your return on time.
3) You could be missing out on tax-free money that the government gives certain groups of taxpayers
A) GST credits for lower-income taxpayers
B) Ontario Tax benefits (or other similar provincial tax credits) relating to sales tax and rent/property tax for lower-income taxpayers
C) Canada Child Benefits for families with children under the age of 18 (all families get a minimum amount based on the number of children they have; lower-income families get more)
D) Old Age Security Guaranteed Income Supplement for low-income seniors
Most of these programs have a July to June payment period based on your prior year income tax return. If you file late, payments will at the very least be delayed. This can be a huge cash flow problem for lower-income families who depend on these tax benefits to supplement their basic needs. So filing on time, or as soon as possible after the deadline, is important. AND if you’re self-employed, these are reasons to file sooner than later, and not to wait until the June 15th filing deadline.
And if you’re not filing your tax return to claim your refunds and other tax benefits, where else are you refusing to receive money that belongs to you? Perhaps it’s in your business, with your clients, or in your job, or from friends and family members.
If you would like assistance in claiming your refunds and tax benefits, or don’t know where to start, feel free to contact me (Linda@visionspire.ca) for a complimentary consultation. And if I can’t help you, chances are I’ll know someone who can.
[author] [author_image timthumb=’on’]http://188.8.131.52/wp-content/uploads/2017/12/IMG_0012-resize-square.jpg[/author_image] [author_info]Linda Spencer is a CPA, CA, Canadian Tax Specialist and Money Mindfulness Coach. With over 20years of assisting business owners with the business and tax strategies, her mission is to eliminate stress and anxiety people experience around money and taxes, by empowering them with the tools, knowledge, strategies and mindsets that will put them in the driver’s seat of their business success and financial wellness, so they can have more harmony, joy and abundance in their life. [/author_info] [/author]