National Post (National Edition)
Looks like the CRA is doing the right thing
April 30 tax filing is what nobody needs at the moment
The looming personal income tax filing deadline of April 30 is probably the last thing on Canadians’ minds right now with the COVID-19 pandemic consuming most of their time and resources.
That is, unless you’re a tax preparer responsible for preparing other people’s returns. But as the National Post, quoting an unnamed source, has learned, the government is preparing to offer some timing relief this tax season.
Self-employed individuals (and their spouses or partners) have until June 15 to file their returns, but any tax owing generally needs to be paid by the April 30 deadline, meaning that a rough estimate of the taxes owing still needs to be prepared in the weeks ahead to meet the payment deadline.
Meeting that deadline could be particularly difficult to do this tax season if you rely on a tax preparer or accountant to file your return and you typically drop off paper documentation with them. Heading out to see your tax preparer in the upcoming weeks should be publicly discouraged given the recent social distancing measures being encouraged. This is of even more concern among those over the age of 65, and those with compromised immune systems or with underlying medical conditions.
The Canada Revenue Agency has not, as of Monday, officially announced any change to the personal tax filing and payment deadline, but the National Post reports that a source indicated the government would extend the deadlines for filing by a month. Instead of filing by the April 30 deadline, individuals would have until June 1 to file, and until July 31, 2020, to pay any balance owing. This is consistent with the measures announced by the Ministère des Finance of Quebec on Tuesday.
Both individuals and registered tax preparers can access copies of most tax slips (T4s, T5s, RRSP contribution slips, etc.) remotely using the CRA’s Auto-fill my return feature to download your tax information into professional tax preparation software.
But other types of documentation tend to be paper-heavy. For example, if you’re self-employed, you’ll likely have detailed schedules of income and expenses, accompanied by a variety of paper receipts, all of which need to be tabulated, categorized and properly entered into the tax software. Similarly, if you own a rental property, there may be a pile of invoices that your tax preparer needs to review to determine whether certain expenses are deductible and whether others should perhaps be capitalized and depreciated over time.
Even individuals with relatively straightforward tax situations could have dozens of donation receipts or medical expenses that need to reviewed before a valid claim can be made on the tax return.
The CRA is taking measures to ensure its employees are safe and has instructed employees who provide critical services to work remotely if possible. Critical services include ensuring that benefits payments continue, processing tax returns and answering calls received in CRA’s Income Tax and Benefit Enquiries and Business Enquiries call centres. CRA employees who perform non-critical services have been asked to stay home, on paid leave, from March 15 to April 5, after which the CRA will re-evaluate the situation.
Let’s hope the CRA and the government do the right thing and extend the filing and payment due deadlines for all Canadians, as we all work together to slow the pace of transmission of the coronavirus.
Jamie.Golombek@cibc.com Jamie Golombek, CPA, CA, CFP, CLU, TEP is the managing director, Tax & Estate Planning with CIBC Financial Planning & Advice Group in Toronto.