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Why you need to file your tax return by May 5

Robyn K. Thompson for Golden Girl Finance

Sure, the government has given us an extra five days, until May 5, to procrastinate on filing our tax returns. That’s because their computer system was hacked (this is the Canadian government, remember, but that’s another story!) and they had to shut down for a couple of days. But you can bet that the permanently frazzled, the organizationally challenged, and the downright forgetful will still miss even the extended deadline this year. My advice: Don’t!

The tax-filing deadline for your 2013 income tax return is on or before May 5, 2014. That means it has to be in the Canada Revenue Agency’s hands (either mailed or Netfiled) on May 5. Good intentions don’t count, so letters stamped with a May 5 postmark but arriving at a CRA data centre after May 5 don’t count. If you’re self-employed, your return for 2013 has to be filed on or before June 16, 2014. However, if you have a balance owing for 2013, you still have to pay it on or before May 5, 2014, whether you’re self-employed or not.


The penalty box

If you owe Canadian income tax and file your Canadian income tax return after the May 5 deadline, the Canada Revenue Agency will charge a penalty of 5% of the balance owing and 1% of the balance owing for each full month that your return is late, to a maximum of 12 months. And the clock starts ticking as of May 1 on those penalties. Depending on what you owe, this can be serious money. And anyway, it’s the principle of the thing. Paying an outstanding balance is painful enough. Why prolong the agony with extra penalties piled on?

It’s also critical to file on time, even if you don’t owe the feds anything. That’s because certain government benefits, like Old Age Security (OAS), the Canada Child Tax Benefit (CCTB), GST/HST benefits, and various provincial benefits depend on what you report on your return. If you don’t file on time, your benefits may be interrupted for a time, although when you do get around to filing, any benefits owing will be paid retroactively. But who needs the hassle?


Don’t wait until May 4!

Thinking of taking your shoebox full of scraps of paper and dodgy-looking slips to your local tax prep joint on May 4? Good luck! Tax preparers, bookkeepers, and accountants are snowed under this week with folks just like you. It’s first come, first served. You might get lucky, but don’t take the chance. Get to a tax office today! In fact, finish this article, grab your shoebox, and go now! There’s a slim chance you’ll still be able to file by May 5.

As for those slips and receipts, keep everything. If you’re not terrific at organization, just put them in a big brown envelope, mark the outside with “2013 tax stuff” and put it in a drawer somewhere. Canada Revenue Agency has been known to ask for proof of various deductions and credits months later. If you can’t produce them, poof! There goes your deduction or credit, and here comes another tax bill.


Start 2014 taxes now

You do not want to get into a situation where you owe the government taxes. Always file your tax return on time. And pay in full any amounts owing. If you owe money and think you can’t pay it in full, talk to your financial or tax advisor immediately. The CRA is willing to talk about a payment plan. But you do have to let them know.

And make a promise to yourself: See a financial planner and start early for your 2014 taxes.

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