Six Good Reasons to File Your Tax Return Before the Deadline
Are you one of those people who waits to the last minute to gather up your documents to prepare your tax return? Well, you’re not alone. Surveys reveal that, every year, 45% of individuals do their taxes in the last two weeks of April. We’ve noted the same trend among our clients in the past three years: 38% of them submitted their documents after April 15th.
Why wait for tomorrow, if you can do it today? The main reasons seem to be the cost of filing returns, lack of time or concerns about having to pay taxes. And yet, it’s inevitable, sooner or later, you have to do it!
Here are six good reasons to file your tax return ahead of time:
1. First, to get your refund more quickly: the sooner you file your return, the sooner you’ll get your refund from the tax authorities.
2. To avoid forgetting to file your returns because you keep putting them off. By constantly putting off your returns until tomorrow, you risk forgetting them altogether!
3. To avoid wait times with your accountant. First come, first served!
4. To avoid late filing penalties. Did you know that late filing penalties amount to 5% of the balance due plus 1% per month of delay, for a maximum of one year? If you aren’t able to pay the balance due, we suggest you reach a payment arrangement with the tax authorities.
5. To make sure you receive all of the refundable tax credits you’re entitled to, such as the GST credit, solidarity tax credit, Canada Child Benefit (CCB) or Guaranteed Income Supplement.
6. Lastly, to benefit from federal interest relief: the Canada Revenue Agency has announced that individuals who received COVID-19 related income support in 2020 will not be required to pay interest on any outstanding income tax debt for the 2020 tax year until April 30, 2022. However, they must file their return on time and their taxable income cannot be more than $75,000. This will give these individuals more time to pay any amount owing. Click here for more information.
To make sure you don’t forget anything, here is a checklist to help you assemble your documents and save time!