One of my favourite saying is: If it wasn’t for the last minute some things would never get done. Many Canadians obviously feel the same way about filing their tax returns, often leaving it to a last minute just before the April 30th deadline.
In 2017 only 4% of taxpayers filed in February; 30% filed in March and the vast majority (two-thirds) filed in April.
But there are some advantages to filing early:
Filing early ensure government benefits like the Canada Child Benefit, the GST credit and other provincial credits are not interrupted.
Early filing also speeds up the time it takes to receive your refund; when electronic filing you should see the money within 8-10 days. This enables you to put the money to work for you faster, investing it or paying down debt.
Last year 96% of those that filed electronically had their returned processed within two weeks, compared to eight weeks for paper submissions.
Of the 4.3 million returns that were filed in April 2018, the average amount owning was $5,509, more than double the amount owning for those that filed in February and March. Calculating early will give those Canadians whom suspect they owe money more time to save and pay the tax bill on time, avoiding additional interest and penalties.
By completing the process in February it could also alert Canadians to save on their taxes by investing in their RRSPs before the March 1st deadline.
You can also protect yourself from scammers by submitting early; it will reduce the chance of someone filing a fraudulent return on your behalf leaving you on the hook for any outstanding balances.
However, racing to get your tax return completed early doesn’t mean filing on February 18th (the season opener) as many income slips don’t have to be mailed to taxpayers until the end of February. In addition, donation receipts and trust paperwork may not come in the mail until March.
The key is to ensure you have all your slips when you are ready to submit your return because any omissions will require you to refile and ultimately delay your refund.
Finally, by gathering your paperwork and meeting with your tax professional early you may save money on fees and get a better result as you can sit down and review your numbers and find out if there is anything additional you need to provide.
As always, I recommend you use a qualified professional to help with financial matters; including the preparation of your tax return. I read a great quote on Linked-In “If you think it is expensive to hire a professional, wait until you see what an amateur cost you”. I don’t prepare tax returns myself, but if you need a name of a good accountant don’t hesitate to give me a call.
Have a great weekend,
Tracey
Source: Original article by The Canadian Press, posted February 28, 2019, Advisor.ca
Image courtesy of ratch0013 at FreeDigitalPhotos.net