If you didn’t ace deadline, don’t expect federal love
Q: I am somewhat concerned that I have not had the opportunity to complete my tax re-turn. Since, my company recently got bought out, I have had to work overtime almost every night. This year, I maximized my RRSP contributions and may receive a tax refund. What are the penalties for late filing or can I call Revenue Canada and get an extension?
A: Revenue Canada agents are more than happy to assist you with an income tax related question. However, you may not have very much success in getting an extension to the April 30 tax filing deadline. Firstly, no agent has the authority to grant an extension to this deadline by phone. You can write and request an extension under very extenuating circumstances, such as a serious illness or death. But this tax filing deadline is a firm one.
Personal income tax filers that owe taxes must file their returns by midnight of April 30 (that was yesterday) and many literally run into the tax offices at two minutes to midnight. Taxpayers that owe income taxes and fail to meet the deadline are subject to a five per cent penalty and one per cent interest per month for one year on the outstanding taxes owing.
Taxpayers that are entitled to a tax refund are not charged penalties or interest for filing late. However, CRA does not give interest on tax refunds for late filers.
Late tax-filers may have difficulty finding an accountant after April 30, most are on R and R, at least for several days. Personally, I am a tennis enthusiast and you will soon find me hitting tennis balls to make up for lost court time during the tax season. The game of tennis is very much like taxes. That’s why I enjoy them both. Consider the taxman not as an adversary but as a challenger that motivates you to continuously improve your game. There are no losers in the game of tennis, just a player that needs to continue practising.
Q: I filed my tax return sometime in March. In early April, I received in the mail a T3 slip from one of my investments. It was my understanding that all these slips had to be mailed out by Feb. 28. What should I do with this slip?
A: You are partially correct. Most T-slips, such as T4s and T5s, must be filed with CRA by Feb. 28. However, trust and the like have until March 31 to file their T3 trust returns. Investments such as income trusts and mutual funds issue T3s. Taxpayers that have these types of investments should not file their tax return before the end of March.
You should wait for your “notice of tax assessment” before considering filing an adjustment. CRA may have these slips on their records and will adjust your return.
Henry Choo Chong, CGA provides accounting and tax services to individuals and businesses in the GTA. He can be reached at 416-590-1728, ext. 304. Any questions to Money Matters should be E-mailed to firstname.lastname@example.org.