Wah, scream, scratch. Tax season can make the best of us rip out our hair in a deadline frenzy, then hurl our bodies into a dark corner, where no one (*cough* CRA *cough*) can ever find us, ever, ever again.
Do this instead.
File and pay your taxes on time otherwise you risk serious consequences, especially if you owe the CRA money. And while the task can seem daunting at best, the CRA can be pretty reasonable, but, just like a hungry baby, they do NOT like to be ignored.
Income Tax CRA Deadlines
The personal income tax deadline is April 30 IF you have taxes owing. If you don’t have taxes owing, you are not required to file a return. However, we recommend that you do so anyway to get your refund and stay eligible for government benefits such as GST cheques, child tax benefits, premium assistance for MSP and Fair Pharmacare.
The income tax deadline for self-employed individuals is very deceiving. If you don’t owe taxes you have until June 15th to file HOWEVER if you owe taxes you need to pay them prior to April 30. without doing your tax return you have no idea what is owing, so we recommend that you file your taxes for the April 30 to avoid interest.
Annual GST payment and filing for incorporated companies is due March 31st, 2017
Annual GST payment and filing for sole proprietors is due April 30th, 2017 despite the fact that your remittance form will say June 15 as the due date. Please see above regarding deceiving deadlines for self-employed individuals.
T4’s must be filed with the CRA and given out to your employees before Feb 28, 2017, if you want to avoid late penalties, which are $25/day.
What are installments??
So you have filed your taxes and discovered that you owe the CRA a lot more money than you expected. You feel your heart sink, you cry for a while and you curse the government for ruining your life.
Just as you finally begin to accept your fate and begrudgingly drain your bank account to pay off your mammoth bill, you receive an installment notification from the CRA. This notification informs you that due to the fact that you owed the government more than $3000 on your previous tax return you are now required to make quarterly tax installment payments (pay your taxes in advance) for the current year. If this isn’t bad enough the fine print will notify you that the first payment is due right away and that failure to pay the amounts requested by their due dates will result in interest being charged.
Although not every person with a bill over $3000 will receive this notification, you should plan to receive it so that you are mentally AND financially prepared.
Important Information about Installments
If you DO NOT get an installment reminder, you DO NOT need to pay installments, unless you would like to voluntarily.
Installment payments are typically due in March, June, September, and December.
You will get a statement of installments paid from the CRA that you will need when you file your taxes.
Installment interest will be charged if you receive an installment reminder and you fail to pay the amount owing in full by the due date.
Exceptions to the Rule
If you anticipate your income for the year is going to be much lower than your previous years’ income eg. you are going on maternity leave and won’t be working for 5 months of the year.
Contact the CRA and discuss this with them. If your tax owing at the end of the year is below $3000 then you won’t be penalized for not paying the installments.
If you need help filing your income tax please don’t hesitate to contact Homeroom SBS today.
Happy tax season!