Deadlines may be extended, but don't wait to file your taxes, experts say
Published Thursday, April 9, 2020 10:37AM EDT
OTTAWA -- As part of the steps taken to help deal with the COVID-19 pandemic, Ottawa has pushed back the deadline for Canadians filing their income tax returns, but financial experts say that's no reason to delay filing your return this year.
If you need the extra time to prepare your return, the time is there for you, but if you are expecting a tax refund, the sooner you file the better, they say.
"For individuals that are expecting a tax refund, filing their taxes sooner can potentially result in their refund being deposited sooner," said Tina Cheung, a wealth adviser at Vancity.
The deadline to file individual income tax returns this year has been extended to June 1, instead of from April 30, while the deadline to pay off a balance if you owe money has been extended to Aug. 31.
Cheung says that means regardless of whether you choose to file prior to June 1 or not, if you owe money, you have more time to make your payment.
But your tax refund isn't the only reason to wait to file your tax return as soon as you can as several government benefit programs are related to your tax filing.
CRA says filing a tax return is crucial to accessing several key benefit programs, even if you have no income, including the Canada Child Benefit, the GST/HST Credit, the Disability Tax Credit and the Child Disability Benefit.
It notes that the financial aid programs -- including beefed up GST/HST credit payments and increased Canada Child Benefit cheques -- announced by Ottawa in response to the COVID-19 pandemic are calculated based on information from last year's 2018 tax returns, so if you didn't file your taxes for 2018, you may not receive help you may otherwise be entitled to.
If you are late in filing your 2018 taxes, the agency is encouraging taxpayers to prioritize filing that return as soon as possible to get their benefits and credits.
Bruce Ball, vice-president taxation at the Chartered Professional Accountants of Canada, says filing your return for 2019 early will help ensure that CRA has the most up to date information when calculating your benefits for those programs for 2020-21.
"You want to make sure that any updates to your information is reflected," he said.
Ball cautions that it is important that you have all your tax slips before your file your tax return this year, because some of the regular slips may have been delayed also as Ottawa has pushed back some of the deadlines.
"If you own a mutual fund or a REIT, you just want to make sure that you've actually got all of the income slips that you're expecting because they may come later this year than they normally do," he said.
Ball recommends taking a look at your tax return from last year and comparing it with this year's return to see if you might have missed anything.
And he says, if you don't already file electronically, this year would be a good time to start.
"It's always I think a great idea to e-file, but this year especially because the process for personal tax returns, they require no human involvement for a majority of returns," Ball said.
"So e-filing is definitely the best way to go this year in terms of getting your refund processed quicker."
This report by The Canadian Press was first published April 9, 2020.