Tax Help for Canadian Tax Season

Reviewed January 2023

When is Tax Season?

Tax season is the period of time when businesses and individuals are working toward filing their taxes before the deadline. It runs from March 7 to June 30 for accountants in Canada. For corporations and businesses with employees, tax season begins in February with preparing T4s for employees. Banks must also prepare T5s in February. This blog post focuses on Canadian individuals and small business tax seasons.

Pay Attention to Your Finances

It’s vital to understand your personal financial situation to communicate everything clearly to your tax accountant. Many tax accountants have transactional relationships with their customers and aren’t available to speak with them throughout the tax year. At KATA Accounting, we want relationships with our customers. We want them to feel comfortable contacting us if they have questions.

Communicate About Tax Season

Remember, if you don’t tell your tax accountant about something, they’ll have no idea it happened.

When Does Tax Season Start?

Tax season for individuals in Canada officially starts on March 7 and runs until April 30. For self-employed individuals, tax season lasts until June 15. Individuals should wait until March to file their taxes because slips are not sent out until the end of February. If you file early, your tax return is probably inaccurate.

When Does Tax Season End in Canada?

Note that the due date becomes the next business day if a deadline falls on a Saturday, Sunday or public holiday. For example, April 30, 2022, is a Saturday, which means the 2022 personal tax deadline is May 2nd.  In 2023, April 30 falls on a Sunday, which means the 2023 personal tax deadline is Monday, May 1st.

Please note the Canada Revenue Agency (CRA) may change the deadline at any time, and it is wise to check their website. World issues and website problems have changed the deadline in the past, and the CRA website is always the best source for real-time information.

Tax Slips for Tax Season

Tax slips are items like your various T4 (or RL-1 in Quebec) and T5 slips. Although most of them need to be mailed or otherwise delivered by your employer by the end of February, some slips won’t arrive until after March.

It’s very important to ensure you have all your slips before filing your return. If you think you should have received a slip but haven’t, it’s a good idea to get in touch with your employer or financial institution to get them.

Sometimes you’ll receive slips from outside the country, such as US 1099 forms, that must be included in your Canadian tax return. If you receive slips like these, be sure to provide them to your tax accountant, so they get recorded appropriately. Although the US has tax season deadlines similar to Canada, other countries can be very different. For instance, in Australia, the tax year ends June 30th, not December 31st.

Personal Tax Payments for Tax Season

ALL personal tax payments are due by April 30th, regardless of your filing deadline. If you are an employee, Canada’s tax system is set up so that the taxes should have already been deducted from your pay and remitted to CRA. However, your employer won’t know about your entire situation. For instance, if you have more than one employer and they don’t know about each other, they probably aren’t taking enough tax off your pay. If your employer isn’t deducting enough tax from your pay, you will have a higher balance owing and should make an early payment.

How to Choose Tax Help

It’s important to remember that not everyone is entitled to a tax refund when they file their taxes. If you find an accountant whose fee is a portion of your refund, it’s a giant red flag that the accountant is not operating above board. Choose an accountant or tax preparer from a reputable organization like the Chartered Professional Accountants (CPA) association.

Ontario Personal Tax Preparation

By working with a CPA, you’re working with a professional accountable to you and the governing CPA organization in their province. To check if your CPA is legit, you can do an internet search on your provincial CPA body and check on their website. For Ontario, here’s the link to CPA Ontario’s Member and Firm Directories. Type in the firm’s or preparer’s name, and you can quickly determine if they are legit.

Installments for Tax Season

Some individuals and corporations must pay their taxes in installments throughout the year. Reviewing your tax return in detail is important to see if this applies to you. We know what you’re thinking: I pay my accountant to do that for me. You’re right to expect good service from your tax preparer. We recommend you check it yourself as well.

Will You Pay Tax?

Individuals are required to pay installments if their taxes owing at the end of the year are in excess of $3,000 ($1,800 in Quebec). Tax installments are due on March 15th, June 15th, September 15th and December 15th and are based on the last year’s taxes filed. For instance, should you owe $4,000, you must pay 4 installments of $1,000 by the dates listed above. Failure to pay your tax installments will result in penalties and interest levied by the CRA.

Will Your Small Business Pay Tax?

Similarly, corporations that owe less than $3,000 are generally not required to pay tax installments. However, most corporations should pay in installments to make year-end tax payments less stressful. Remember, reviewing the installment schedule on your T2 Corporation Tax Return is important to ensure you are paying on time. Corporations pay monthly, quarterly, or yearly. Those with higher revenue usually pay monthly.

Canadian Tax Season Deadlines

Personal Tax Returns

For most people, your T1 personal tax return is due April 30th. For self-employed individuals, this deadline is extended to June 15th. However, tax payments for the self-employed are still due April 30th with everyone else.

Corporate Tax Payments

Tax payments for corporations are due two months after their fiscal year-end. However, if the corporation is a Canadian-controlled private corporation (CCPC), the tax payments are due three months after the fiscal year ends. If you aren’t sure if your business is a CCPC, ask your tax accountant about it.

Corporate Tax Returns

T2 Corporate Tax returns are due six months after the fiscal year’s end. Remember that the tax payments are due two months after the fiscal year ends, regardless of when you file your taxes. It is important to use a proactive tax accountant in the area. Keeping up with your corporation’s bookkeeping is also important, so accurate tax estimates can be made.

GST/HST Sales Tax Filings

Whether you are a corporation or an individual, you must register for a GST/HST number if you will make more than $30,000 in any rolling 12-month period. Once you register for a GST/HST number, you are required to file based on the schedule the CRA puts you on. Generally speaking, this is quarterly or annually.

For annual filers who are individuals, your GST/HST payments are due by April 30th, and your GST/HST filing is due by June 15th.

For annual corporate filers, your GST/HST payments and filing are due within three months of the end of the reporting period. Remember that your reporting period can be any date, not just December 31, so it’s important to know what it is. The CRA letter will tell you this info. For instance, if your reporting period ends on November 30th, your filing and payment are due by February 28th.

Quarterly and monthly filers have their filings and payments due by the end of the month following the end of the reporting period. For instance, if your reporting period ends on March 31st, your filing and payment are due by April 30th.

Check Up On Your Tax Accountant

Your tax accountant can help you file your taxes. But you are responsible for signing your return and certifying that the information is complete. Make sure you thoroughly review your return and ask questions – it’s your money, and you deserve answers. Even the best of us make mistakes. If you go with a shady accountant, it’s your responsibility when the CRA reviews it either way. Be sure that you’re using someone qualified and above board.