Tax time: Procrastinators have extra time to file

It’s tax time again, with the deadline this year for filing set for midnight on May 2 for most Canadians.

  • Apr. 29, 2016 7:00 p.m.

ROBERT BARRON CITIZEN

It’s tax time again, with the deadline this year for filing set for midnight on May 2 for most Canadians.

The Canada Revenue Agency traditionally sets the end of April as the deadline each year, but the fact that April 30 falls on a Saturday this year means people have two extra days to file.

But, despite the extension, procrastination plays a big part each year at tax time, with many people putting off the gruelling work of crunching the financial numbers of their lives as long as possible.

According to a recent H&R Block survey, one in five Canadians say they file just in time for the annual deadline, and three per cent admitted they habitually hand them in late.

Canadians aged 35 to 54 are the worst offenders, with 29 per cent saying they file just before or past the deadline, according to the survey of 1,506 adults conducted by Angus Reid.

Men are slightly more likely than women to procrastinate, according to the survey.

Susan McInnes, owner of the Duncan-based S. McInnes & Associates accountant firm,  said if you are owed money after completing your tax forms for the year, the pressure is off to file on time.

In fact, McInnes said some people who the government owes tax money to have gone years without filing their taxes with no repercussions, even though citizens are required to file their taxes by the deadline.

But it’s a completely different story for those who owe money and fail to file their taxes on time.

McInnes said if you owe money, you could be subject to financial penalties and interest on the amount owing immediately after the deadline passes.

She said the Canada Revenue Agency will send notices to the delinquent taxpayers and continue to charge interest on the amount owed until the outstanding money is paid.

“If it’s a large amount of money and you don’t make any efforts to pay it, then steps can be taken by the CRA that include the freezing of bank accounts and the garnishing of wages,” she said.

“There’s not even a limit as to how much they can garnish your wages, and it can be as high as 100 per cent. But those are extreme cases and, typically, only used when the CRA thinks it is being ignored and is trying to get people’s attention.”

McInnes encouraged people to ensure they identify and apply for as many tax deductions they are qualified for. She said the one area that many people don’t realize they qualify for tax exemptions and deductions is medical expenses. Medical expenses are also a very detailed area on the tax forms and many of her clients are surprised when they are told how much they can deduct for them.

“It’s important to ask your accountants all the questions you have regarding your taxes,” she said.

“People should tell their accountants about any changes in their lives, like buying a new home or having new kids over the past year, because there could be deductions there that they are not aware of. People’s accountants probably don’t know about these changes in their clients’ lives so it’s up to them in many cases to bring it up.”

Even though filing taxes is technically not required for those earning less than $12,000 a year, low-income Canadians could miss out on government benefits altogether if they fail to file a tax return, according to the CRA’s website.

That’s because the tax return is required to access federal government benefits like GST credit or childcare credits, or some provincial credits like B.C.’s working-income tax benefit.

The website also points out that many people on Employment Insurance and maternity leave incorrectly assume they will receive large tax refunds.

But the problem is the government withholds just 10 per cent in taxes on people in those categories, short of the 15 per cent in the lowest federal tax bracket.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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