TORONTO – With Wednesday’s midnight deadline bearing down, millions of procrastinators across Canada are scrambling to get their income taxes done and filed.
Some waited more than two hours at a downtown Toronto tax service company Tuesday to get their finances in order before 11:59 p.m. Wednesday – a last-minute trend that comes as no surprise to those in the business.
“From year to year, the majority of taxpayers send their tax returns during the last week of the filing season,” Canada Revenue Agency spokeswoman Catherine Jolicoeur said.
“We expect approximately 25 million tax returns and have received, as of April 27, 2008, approximately 17 million.”
Jolicoeur said the CRA has already dished out more than 11 million refunds each worth, on average, about $1,400.
In 2006, the government issued nearly 15.7 million refunds, each averaging about $200 less, she said.
Cleo Hamel, a senior tax analyst with H&R Block, suggested more people are likely to get refunds this year because of new tax breaks introduced by the federal government.
An increase in the personal exemption amount and a 15-per-cent cut to the minimum tax rate are saving people an average of $150 to $180, she said. Meanwhile, those with children under the age of 18 have benefited from tax credits worth $300 per child and the children’s fitness credit has also proven a boon to families.
“Your average family could be looking at $600 to $800 in tax savings and that’s a significant dollar amount,” Hamel said, adding seniors have also benefited from new income splitting allowances.
“We’ve actually seen some situations where seniors are saving $500 to $1,000 just because they’re able to pension income split.”
Those who have yet to file are likely those who owe and are simply “trying to put off the inevitable,” she said, adding they ought not procrastinate too long.
Late filers who owe taxes to the government face a five-per-cent penalty – an amount that doubles to 10 per cent for habitual late filers, she said.
On top of that, debt that isn’t paid by April 30 faces interest charges of one to two per cent every month.
“Don’t just think ‘Oh, the five per cent or one per cent isn’t a big deal,”‘ Hamel said. “It adds up and why give the government any more money than they need?”
In 2006, Jolicoeur said more than 3.6 million Canadians owed the government money after filing their income taxes.
Jessica Kroez, a 25-year-old designer for Teletoon, was one of them. Expecting the same again this year, Kroez said she doesn’t mind having to wait more than two hours to meet with a tax specialist.
“I’m not very good with numbers and I would rather just have the piece of mind that it’s done properly and I don’t have to worry about it,” Kroez said as she waited at a downtown Toronto H&R Block with about a dozen other last-minute filers Tuesday afternoon.
Anne Wood had also been waiting two hours as a favour to her husband who is away on business.
“I have two years here with me today because he didn’t file last year,” she said. “I’m just a nice person.”
While the Canada Revenue Agency has already received more than 6.3 million paper returns and nearly 415,000 returns filed by telephone, electronic filing has become the most popular method.
So far, nearly 10.4 million Canadians have filed their income taxes electronically, half-a-million more than were filed electronically at the same time last year.
Of those, about 3.3 million were filed by individuals – those who opt to do their taxes on their own, Jolicoeur said.
It’s a brave task according to John Williamson of the Canadian Taxpayers Federation, who argues personal income taxes have become unnecessarily complicated in recent years.
The CTF is calling on the government to reduce the number of tax brackets to two from four and scrap 80 to 90 per cent of the tax credits that currently exist, maintaining only the universal ones like basic personal allowances, spousal allowances, the RRSP deductions and charitable giving.
