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Tax Tips & Pits: Why should you file your tax return?
If you qualify for refundable tax credits like the GST credit, why not file?
If you qualify for dependant payments like the Universal Child Care Benefit, why not file?
If you qualify for reduced premiums like MSP, why not file?
If you are owed a refund, why not file?
Now if you owe tax and if you have not filed, your continued procrastination will continue costing you money. In fact, the day after April 30 - May 6 this year due to CRA’s e-services shut down in early April – the tax you owe may have a 5% penalty applied, and not to be alarmist, but that penalty could be as high as 50% of taxes payable.
As each month passes, an additional 1% penalty is applied.
In addition to the possible penalty, Canada Revenue Agency (CRA) charges 5% interest compounded daily on taxes and penalties owing.
To clarify tax return deadlines for proprietors. It is true that the due date is June 15 for the filing of the return, but if taxes are due, they were payable on April 30, like everybody else’s. If you haven’t filed, then it might be wise to estimate taxes due and pay that amount now.
Whether you are owed by or owing to CRA, clearly the recommendation is to file 2013 as soon as possible.
By the way, not filing is sometimes in reaction to not being able to pay the taxes due. Why file if you can’t pay anyway?
If you can’t pay, filing sooner than later is still the best course of action. CRA looks much more kindly on those taxpayers who self-identify than those they have to chase.
The next step you should take after filing is to call CRA and state a payment date or offer installments.
There’s no guarantee a plan will be accepted but at least your file will be tagged as cooperative.
Filing late is a sure way of attracting CRA’s attention, and I’m not aware of anyone who enjoys being contacted by CRA.
If you would prefer CRA to stay out of your life, file your return. File on time, preferably. And don’t let a CRA enquiry go unanswered, even if your initial answer has to be, “I’m working on it”.