Consider Filing Tax Return Now
While the government has extended the 2019 personal tax filing deadline to June 1 from April 30 because of the COVID-19 pandemic, you may still want to consider filing on time or even early.
If you’re expecting a tax refund this year, why wait? Filing your taxes now could give you immediate access to some extra much-needed cash owed to you.
A tax refund typically arises when the amount of taxes you’ve paid throughout the year from taxes withheld by your employer is larger than the amount of tax you actually owe.
The amount of taxes your employer withholds will typically be calculated to include various standard tax credits but doesn’t consider additional eligible expenses you may be able to claim or RRSP contributions that you’ve made. These additional deductions result in you paying more tax than you have to.
Filing now can also help ensure that you qualify for additional income tested benefits such as the GST/HST credit or the Canada Child Benefit – both of which are going to be bolstered as part of the pandemic stimulus program.
The CRA is continuing to process tax returns during this pandemic and you can file your return electronically. They can facilitate and encourage you to utilize the direct deposit option for receiving your tax refund as well.
As of March 9 2020, the CRA had received approximately 3.4 million personal tax returns and 92.5 per cent of them were filed electronically. Of the nearly $4.7 billion in tax refunds that have been paid to date, 85 per cent of them were paid via direct deposit – to the tune of an average refund per person of $1,820.
Any 2019 tax slips that you need can be accessed remotely as well using the CRA’s “my account” or even the auto-fill feature that allows you to download tax information into professional tax preparation software. A full list of CRA-certified software can be found on their website including some programs that are completely free.
If you find out that you owe money after filing your return, you now have until Sept 1 2020 to pay which is four months later than the normal April 30 deadline. The government has confirmed that no penalties or interest will be incurred during this time and likewise for delaying your June 2020 quarterly personal tax instalment to the same Sept 1 date.
As the pandemic situation rapidly evolves, so too does the government’s financial response plans. Be sure to take the time to keep up to date on the latest developments and take advantage of any financial relief programs that are being offered if you need help.
And consider filing your return now even if you don’t have to – there is really no downside to doing so but it may help you access some extra funds at a time when they’re most needed.