Tax filing deadlines compel most ó but not all ó of Canada's 23 million tax filers to arrange their affairs and reconcile last year's taxes by April 30. There are however, many late filers. Last week's Breaking Tax and Investment News covered the penalties associated with non-compliance in depth.
Failure to file will also cost you potentially large sums when you miss important planning opportunities. For example, tax form T1032 Joint Election to Split Pension Income must be filed by your tax filing due date (which for most people is April 30). This is a very lucrative income splitting opportunity for those receiving qualifying pension income and it would be a shame to miss the extra tax refunds due to tardy tax filing habit. Those advisors in the tax and financial services industry should be sure to call all clients who have not yet filed a return by April 30 to maximize availability of this type of provision and of course avoid late filing penalties.
CRA should continue to be on the radar screen, however, even after this week's April 30 tax filing deadline. Please be sure to diarize milestones that maximize your rights under the Income Tax Act:
KNOWLEDGE BUREAU CHECKLIST:
INCOME TAX DEADLINE MAXIMIZER
WITHIN THE TAX FILING YEAR ENDING APRIL 30
|April 30||Tax Filing Deadline: Personal Tax Returns|
|May 1||Interest accrues daily on overdue taxes owing|
|June 15||CRA owes interest to tax filers on late processed refunds (in fact, the agency has an obligation to process refunds within 45 days of receipt of the return after April 30)|
|Tax Filing Deadline: Proprietorship Returns|
|Quarterly Instalment Payment Due|
|July 1||New Benefit Year: Child Tax Benefit, GST Credit, Old Age Security (file 2007 tax return to determine benefit levels)|
|August 31||Working Income Tax Benefit Advance Payment Application for 2008|
|September 15||Quarterly Instalment Payment Due|
|December 15||Quarterly Instalment Payment Due|
|December 31||Annual Instalment Due for Farmers, Fishers|
|January 16||Request to Defer Tax on $100,000 of Securities Options|
|January 30||Requirement to pay interest on inter-spousal loans|
|February 28||T4 Slip Completion and Distribution|
|March 15||Quarterly Tax Instalment due|
|March 31||T3 Slip Completion and Distribution|
|Interest Penalty Due on RRSP Excess Contributions|
For more information on tax planning provisions and compliance requirements subscribe to The Knowledge Bureau's online tax reference for taxpayers, financial advisors and their clients: EverGreen Explanatory Notes. To increase your knowledge and train new staff ready to help your expanding practice in tax season 2008, enrol in tax courses within the Tax Services Specialist program from The Knowledge Bureau.
Next time: Just How Long do you Have to Keep Those Tax Receipts in your Closet?