The Importance of Filing your Taxes on Time
By now, you’ve probably marked April 30th in your calendar very clearly as an important day. No, we’re not referring to National Honesty Day, but let’s be honest, it’s a date that gets overlooked and dismissed a little too often. April 30th is the deadline to file your 2017 taxes.
For those of you who still need to file, don’t worry, you’re not alone. Last year, an H&R Block study found that two out of five Canadians waited till the last minute to file and ask them -they wouldn’t do it again. Here’s why you should make every attempt to file your taxes on time.
Avoid Paying the Price
The CRA can charge you 5 per cent of what you owe, plus an additional 1 per cent for each month you fail to file, for a maximum of 12 months.
If you were charged a late-filing penalty on your return for the past three years, your late-filing penalty for this year could be 10% of your 2017 balance owing, plus 2% of your 2017 balance owning for each full month your return is late, up to a maximum of 20 months.
Don’t rush; avoid overlooked tax opportunities
Many changes have been made that may reflect how you file this year. Don’t procrastinate and wait until it’s too late. Ensure you have your receipts, T-slips and notice of assessment/re-assessment and consult a professional to ensure you maximize your return.
The National Transit Tax Credit
The government announced the elimination of the public transit amount on June 30, 2017. You can still claim a 15 per cent non-refundable tax credit for transit passes purchased between January 1 and June 30, 2016 on your 2017 income tax and benefit return.
Small Business Tax Changes
The government lowered the small business tax rate to 10 per cent, as of January 1, 2018, and intends to lower further to 9 per cent, by January 1, 2019.
Children’s Arts and Fitness Tax Credits
Note: The Children’s Fitness and Arts Tax Credit and the additional amount for children eligible for the disability tax credit are no longer available this tax season.
Military salaries of all deployed Canadian Armed Forces personnel would be exempt from federal income taxes.
Education Tax Credit
On January 1, 2017 the federal government eliminated the federal education textbook and tax credits, meaning that 2016 was the last year where students could make these claims.
- Be mindful of additional tax savings opportunities including:
- Charitable donations
- Medical expenses
- Moving expenses
The only way to file late without penalties is if the government owes you money however the CRA can keep your refund until you file your return. Self-employed individuals and their spouse or common-law partner have until June 15, 2018 to file their return. However, any balance owing for 2017 must be paid on or before April 30, 2018 to avoid interest.
Moral of the story is that you should file on time to avoid interest, penalties and even interest on your penalties but even if you miss the filing deadline, you can and should still file to minimize your penalties.
This time of year is a stressful one and that’s why we’re. Whether you want to file online like almost 90% of Canadians using our online tax software or consult a professional at one of our locations, we’re happy to help you get what’s yours and start off the month of May with a huge weight lifted off your shoulders.