Annual personal tax filing
A reminder of key dates for the 2019-2020 tax year
While this public health crisis will eventually end, tax filings are still required to be submitted.
Words can’t adequately paint the picture of all that has happened, is happening, and is yet to happen during the COVID-19 pandemic. However, one thing that is not going to go away – taxes (and the filing of same). The federal government has offered large monetary and other support services to many Canadians, including a couple of concessions around personal tax filings. Personal tax-return filings for tax-year 2019 are now due June 1,2020 for employees and June 15, 2020 for self-employed individuals. Additionally, there is a penalty-free extension for the payment of current taxes, to September 1, 2020.
Normal filing deadlines for tax year 2019 would be April 30 for employees and June 15 for self-employed individuals. Most employees should by now have received all tax slips as expected and be in a position to file a tax return (T4, T3, T5, TRIF, TRSP, etc.).
So, if the filing deadline has been deferred, should I delay my tax filing?
Option one: “I’m expecting a refund from the CRA”
In this situation, it is guaranteed that unless the return is filed with the Canada Revenue Agency (CRA), there will be a 100% chance of no refund! So, YES, ensure the tax return is filed electronically for the fastest refund deposited to your bank account.
Option two: “I expect to owe money to the CRA”
In this situation, there is no need to delay and filing your return as soon as you have all your information BEFORE the filing deadline is key. Although the amount owing for 2019 is not due until the date of the extended payment deadline, currently September 1, a significant late filing penalty based on the 2019 balance owing is applicable if the 2019 tax return is not submitted by the filing deadline.
Note: This extension of the payment deadline to September 1 includes individuals who would normally have to make a June 15 instalment payment for 2020 taxes.
A third consideration is your eligibility for any other government benefits, such as the Child Care Benefit. Delaying your tax filing could negatively impact the amount of these benefits.
See the CRA’s comprehensive list of tax-filing deadlines for personal, corporate, trust and other types of returns.
Regardless of whether you are physical distancing in “camp refund” or in “camp owing,” there is no need to incur a late-filing penalty from the CRA just because the filing deadline was missed. Life will undoubtedly be offering us new challenges in the weeks and months ahead: Completing the annual tax filing is the prudent thing to do.
Richardson Wealth’s Tax & Estate Planning team has prepared a number of tax-related articles as well as an annual tax-filing checklist. Contact us for more information.