Covid-19 has left many of us confused by the constant changing of our routines and schedules. Adapting to the ‘new normal’ has been challenging for most; despite the fact it is for the greater good. However, some things never change, and in Canada filing our taxes is one of them.
This Monday June 1st is the deadline to file your 2019 tax return. For self-employed individuals, the deadline remains as June 15th, and those who must file a GST HST return have until June 30th.
While the deadline was pushed back from the traditional April 30th cut-off, the penalty for filing late has not changed; remaining at 5% of balances owing, plus any interest that could accumulate.
However, along with the deadline to file, the deadline to pay any amounts owing by individuals or small businesses has been extended to September 1,2020. For those that pay their taxes quarterly by installment have had their June 15th payment postponed to September 1st as well; all without penalty and interest. CRA has posted on their website that some taxpayers may have received a Notice of Assessment that says the deadline for payment is April 30, 2020, this is incorrect.
The government uses your tax return to calculate whether you qualify to receive any provincial or federal tax credits and certain benefits. If you don’t file because you did not have an income, you may be missing out on things like the Canada child benefit or the GST/HST credit.
It is important to review your return to ensure you have not missed anything. For example, with the kids home in 2020, it would be easy to forget to claim the childcare expenses on your 2019 taxes. Making sure to include all the credits available to you may earn you a bigger refund now, when you can really use the money.
If you lost your job due to the pandemic and are receiving CERB it is important to remember that the benefit will be considered taxable income and will need to be included on your 2020 tax return. Therefore, you should be adding the benefit ($8000) to your 2020Â employment income. The lowest federal tax bracket is 15% and in Ontario it is 5% for provincial tax. So, you should be putting at least 20% of the funds aside to help pay for your 2020 tax bill.
If you need help, it’s not too late to hire a professional. If you are scrambling around Monday morning trying to find a professional tax preparer; go big like H&R Block or go small like Taxplan to get the job done. Many mid-sized firms are already starting to turn people away.
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 costs you”. I don’t prepare tax returns myself, but if you need a name of someone who does, don’t hesitate to give me a call.
Have a great weekend,
Tracey
Sources: post on Globalnews.ca 04-25-17 by Erica Alini, professionals referenced in article include Gennaro De Luca of Taxplan Canada, Lisa Gittens of H&R Block, Article by James Burton COVID-19 tax deadline Get what’s yours, posted 05-25-2020, CRA Website,