Tax Help for Canadian Tax Season

KATA offers tax help for Canadian tax season

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 many individuals in Canada. For corporations, tax season begins in February with preparing T4s for employees. Banks must also prepare T5s in February.

Canadian Tax Season

This post will keep things simple and applicable to the majority of Canadian individuals and small businesses.

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 speak with their customers throughout the tax year. At KATA Accounting, we want relationships with our customers. We want them to feel comfortable reaching out to us any time 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 March 7 and runs until April 30. For self-employed individuals, tax season lasts until June 30. 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 if a deadline falls on a Saturday, Sunday or public holiday, the due date becomes the next business day. For instance, April 30, 2022, is a Saturday, which means the 2022 personal tax deadline is May 2nd. 

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, but 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 need to 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 actual 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 that is part of 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 who is accountable to you and to the governing CPA organization in their province. To check if your CPA is legit, you can simply 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. Simply type in the name of the firm or preparer and you can find out if they are legit quite quickly.

Installments for Tax Season

Some individuals and many corporations are required to pay their taxes in installments throughout the year. It is important to review your tax return in detail 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 just 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 upon the last year’s taxes filed. For instance, should you owe $4,000, you will be required to pay 4 installments of $1,000 by the dates listed above. Failure to pay your tax installments will result in penalties and interest being levied by the CRA.

Will Your Small Business Pay Tax?

Similarly, corporations who owe less than $3,000 are generally not required to pay tax installments. However, most corporations should pay by installments to make year-end tax payment less stressful. Remember, it’s important to review the installment schedule on your T2 Corporation Tax Return to make sure 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 their 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 end. Keep in mind that the tax payments are due two months after the fiscal year end regardless of when you file your taxes. It is important to use a tax accountant that is proactive 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. Keep in mind 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 November 30th, your filing and payment are due by February 28th.

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

Don’t Like Reading CRA Letters? 

Check Up On Your Tax Accountant

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

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