Yahoo Finance Many Canadians are delaying filing their taxes out of fear of owing money, survey says
An increasing number of Canadians have delayed filing their taxes because they’re worried about owing money this year, according to a new survey by H&R Block Canada.
With less than a week to go before the April 30 deadline, 23 per cent have yet to file their taxes, according to the survey of 1,506 Canadians from April 22-24. While 71 per cent of those who have not yet filed plan to do so before month’s end, a quarter expect to miss the deadline and the remaining four per cent don’t plan to file at all.
“The Canada Revenue Agency reports that every year, around 10 per cent of Canadians fail to file their taxes, but we’re seeing an increase in delayed filing this year, and many who anticipate they will miss the filing deadline altogether,” Yannick Lemay, a tax expert at H&R Block Canada, said in a press release.
Nine per cent who plan to file said they are procrastinating because they fear they owe money, but 63 per cent said they just haven’t gotten around to it yet.
“We know that for some people, the fear of owing money is a big contributing factor, although the vast majority of people who have filed so far have received a refund,” Lemay said.
Among those who will miss the deadline, 22 per cent said they have simply not prioritized it yet, while three per cent are concerned about owing money.
Of those who don’t plan to file their taxes, the driving factors are evenly split between it not being a priority and being worried about owing money.
“Our message to all Canadians is to file your taxes before the April 30 deadline,” Lemay said. “Avoiding filing is never the answer, as you may end up owing more money through late-filing penalties and fees — and you may be pleasantly surprised by the tax credits and benefits you’re entitled to.”
Indeed, only 18 per cent of respondents said they feel that they have a true understanding of the tax credits and benefits they may be entitled to. As a result, many Canadians could be pleasantly surprised by getting a refund or year-round benefits that offset the amount they owe in taxes.
A separate survey by Canadian Imperial Bank of Commerce said many people are relying on anticipated tax returns to combat rising living costs this year. The top ways they plan to allocate their refund include saving the money, paying down debt and spending on essentials. Only 12 per cent intend to invest their tax return.
Filing taxes late could also cost Canadians. Those who filed any of their past three tax returns late and received demand letters from the Canada Revenue Agency could be subject to higher late-filing penalties on what they owe, the H&R Block report said.
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There are options available to those who owe money, but don’t have the funds to cover it, such as negotiating a payment plan or paying in instalments that work for them and the CRA, the report said.
