Yahoo Finance Taxes 2024: Seven best tips for last-minute filers as the tax deadline approaches
With the April 30 deadline approaching, time is running out for most Canadians to file their 2023 income tax returns. But it’s not too late to get started.
Yahoo Finance Canada spoke to Stefanie Ricchio, chartered professional accountant and tax expert at TurboTax Canada, and Gerry Vittoratos, national tax specialist at UFile, about what to do if you find yourself in a last-minute scramble.
Understand the consequences of filing late
First, Ricchio says it’s critical to understand the deadlines and repercussions for filing late. The deadline for employees is April 30, while anyone who’s self-employed has until June 17, as the June 15 deadline falls on a Saturday.
“But what’s really important is, if you have a balance outstanding, that it all [must be] paid by April 30 whether you’re an employee or you’re self-employed,” Ricchio said.
If you don’t pay on time, you’ll start to incur interest on the unpaid amount, compounded daily, at an annualized rate of 10 per cent. On top of that, if you have a balance owing and file your return late, you’ll be charged a penalty of 5 per cent on the amount you owe, plus an additional 1 per cent for every month your return is late, according to the Canada Revenue Agency (CRA).
Late-filing penalties are even stiffer for repeat offenders, Ricchio notes.
“If you owe money to the government, that’s when it gets really nasty,” Vittoratos said.
If you’re due for a refund, there’s no penalty for filing late. The government will still reimburse any amount you’re owed once you submit the return, Vittoratos said. But the longer you wait, the longer your refund will be in the government’s hands.
“Why would you do that favour for the government?” Vittoratos said. “Take that money and do something useful with it.”
Ricchio points out that late returns may also delay payments for certain credits and benefits, such as the GST/HST credit and the Canada Child Benefit.
Use a checklist to make sure you don't miss out on deductions
Vittoratos says the most common mistakes people make on their tax returns, especially when rushing to complete them, are “mistakes of omission.”
“Essentially just not claiming things that you should be claiming,” he said.
To make sure you haven’t missed any potential deductions, Vittoratos recommends having your previous year’s tax return handy as a reference. Then, if you have any questions about a specific line number, you can type it in on the CRA website to get an explanation, he adds.
Ricchio suggests using a checklist to ensure you have all the necessary documents.
“It takes away some of that anxiety that you might already feel because you think, ‘Oh my gosh, I’m late,’” she said, referencing TurboTax Canada’s 2023 tax checklist.
If you’d rather pass your taxes off to a professional or get some oversight through the process, Ricchio says “it’s not too late to leverage expert help.”
Get started as soon as possible
Anyone who hasn’t filed their taxes yet should get started as soon as possible, Vittoratos stresses. Waiting until the last few days may not leave enough time to locate missing documents or gather funds if you have a balance owing.
“You need that maneuvering room in case you have any surprises,” Vittoratos said.
He recommends allocating three days to the process if you’re filing your own return: one for gathering documents, another for data entry, and a third for review and submission.
“The last thing you want is to have to produce your return within like two or three hours,” Vittoratos said. “Then you’re going to be missing things.”
More tips for last-minute tax filers
File electronically: Filing online using a certified tax software is the best way to ensure you meet the deadline, Ricchio and Vittoratos agree. They both also suggest utilizing the CRA My Account portal, which allows you to auto-fill parts of your return.
Be aware of this year’s tax changes: One change to be aware of this tax season is how to file home office expenses, Ricchio notes. Unlike the last few years, you need to get a signed T2200 form from your employer and calculate your exact eligible expenses – based on the amount of time you worked from home and the size of your workspace.
Negotiate a payment plan: If you can’t pay your tax bill, Ricchio says the CRA might be “willing to work with you” on a payment plan. Regardless, you should submit your return on time to avoid the late-filing penalty.
Start preparing for next year’s return now: Vittoratos suggests creating a folder and compiling any receipts or documents that may be related to your 2024 income tax return throughout the year. That way, you’ll be in a better position next tax season.
Farhan Devji is a freelance journalist and published author based in Vancouver. You can follow him on Twitter @farhandevji.
