Personal (T1) Tax Filing Deadlines
Clients often get anxious about tax filing deadlines and the possibilities of what that means in the eyes of the Canada Revenue Agency. When that happens, many clients adopt a “head in the sand” position and choose to ignore filing deadlines. As we know from experience, sooner or later, we must face up to the reality of the situation and tackle it head-on.
Let’s take a look at filing deadlines and what happens if those deadlines are not adhered to.
PERSONAL T1 RETURNS – Individuals with Employment Income
Filing Deadline: April 30th (midnight)
If April 30th falls on a Saturday or Sunday, then the deadline shifts to the following Monday. If you are mailing in your return, it must be postmarked prior to this deadline. You can also submit your return electronically via a tax preparer or home tax software program. Additionally, you can always drop off your return at a local CRA office: http://www.cra-arc.gc.ca/cntct/tso-bsf-eng.html .
If you are owed a refund from CRA, you can file your return anytime — there is no penalty for late filing. If, on the other hand, you owe CRA money, then you will pay a late filing penalty (5% of the balance owing + 1% of the balance owing for each full month that the return is late up to a maximum of 12 months) . If you have been charged a late filing penalty in any of the preceding three years, the late filing penalty may be 10% of the balance owing + 2% per month. Interest is also charged on the balance owing and that rate is determined by CRA every three month. Currently, the rate is 5% of the amount owed per year.
Any outstanding balances owed to CRA can be paid in a number of ways:
a) Online Payment – To pay online, you need to add the CRA to your list of creditors (using your SIN as your account number) through your online banking program. Simply pay it as you would any other bill online.
b) Payment at a Canadian Financial Institute – To pay at a bank, simply make out a cheque for the amount owing to Receiver General. Be sure to put you SIN on the back of the cheque and indicate in the note section the year for which the payment is for (ie. 2013 Taxes). You will need to include a payment form with your cheque which can be requested via the My Account section of the CRA website or via phone 1-800-959-8281. Additionally, your tax preparer should be able to provide the payment form to you. The other option is to wait for your Notice of Assessment (NOA) to arrive (usually 10-14 business days after filing your return) as a payment form will be included with it.
PERSONAL T1 RETURNS – Individuals with Self-Employment Income or Spouses of Individuals with Self Employment Income
Filing Deadline: June 15th (midnight)
If June 15th falls on a Saturday or Sunday, then the deadline shifts to the following Monday. If you are mailing in your return, it must be postmarked prior to this deadline. You can also submit your return electronically via a tax preparer or home tax software program. Additionally, you can always drop off your return at a local CRA office: http://www.cra-arc.gc.ca/cntct/tso-bsf-eng.html .
NOTE: if you have a balance owing, the payment deadline is still April 30th.
Missed Deadline / Payment Options
Installments are periodic tax payments made to the CRA for income earned during the year. This situation arises when you are earning income without tax being withheld at the source (ie. rental income, investment income or self employment income). You have to pay installments if your net tax owing is over $3000 in 2014 and in either 2013 or 2012.
Installments are due four times during the year: March 15th, June 15th, September 15th and December 15th. If any of those dates fall on a Saturday, Sunday or holiday, then they are due by the first business day following the payment date. Installments can be made via your financial institution, online or by mailing in a cheque or post-dated cheques to the CRA.
CRA charges a penalty & interest for missed installment payments or any payments that are less than the required amount. Actual amounts of the penalties and interest vary depending on your situation. For more information, visit www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/pymnts/nstlmnts/ntrst-eng.html.