Last-minute tax tips before deadline

You only have a few more days left to file your income tax return. Here are some last-minute tax tips.

If you file your tax return late and you owe tax, there will be stiff late-filing penalties plus arrears interest charges based on the amount of income tax you owe.

Even if you cannot pay the full amount you owe on or before April 30, you can avoid the late-filing penalties by filing your return on time.

Self-employed people have until June 15 to file their income tax returns. However, they must pay their estimated tax owing by April 30. To avoid arrears interest charges, they can overpay and later receive a small refund.

If you’re a procrastinator who has not yet gathered and organized your tax papers, you, too, can deliberately overpay your estimated tax by April 30 and then file your tax return penalty-free after April 30.

Matching program

The Canada Revenue Agency (CRA) has a matching program to track tax slips. CRA systematically reviews the electronic information obtained from employers and financial institutions that issue tax slips. CRA matches Social Insurance Numbers on tax slips to what is reported on tax returns.

CRA will let you know if you have forgotten to report any tax slips or missed entering an amount from one of the boxes.

It is easy to inadvertently omit reporting income, especially if you have moved recently. Tax slips mailed to your old address may have been returned to the sender. What if you opted for a paperless tax receipt service with your financial institution? Maybe you printed T5 slips issued at the end of February but forgot to print T3 slips issued at the end of March.

If you discover that you missed reporting a slip, file a “T1 adjustment request” before the CRA slip matching program discovers your unreported income. Repeat offenders incur penalties of 20 per cent of unreported income even when there is no additional income tax owing.

If you cannot find a tax slip, call CRA to obtain tax slip details over the telephone.

My Account

Apply for “My Account” online access. Learn when you can expect your tax refund to be deposited to your bank account. Review transactions that have occurred in your tax account.

Payment not lost

A common scenario occurs around this time every year. Suppose you electronically file your income tax return in the last few days of April. You owe tax. You write your cheque to pay the tax due by April 30.

You may receive your Notice of Assessment in early May asking you to pay the tax owing (again). To solve the mystery of the missing payment, you can phone CRA’s general inquiry line at 1-800-959-8281 or visit My Account online. Most likely you will discover that your tax payment has been parked temporarily in a 2015 instalment account before being applied toward your 2014 tax owing. It doesn’t take long for your payment to be moved to the 2014 account where it belongs.

Family tax cut not law

The new “family tax cut” allows eligible families with children younger than 18 to save up to $2,000 on their 2014 taxes. This is still technically only a proposal until legislation, which was introduced on March 27, is passed into law.

If you forgot to claim your family tax cut credit on your tax return, you can still make an adjustment request to claim the family tax cut. However, expect reassessment of your 2014 tax return to be delayed until the law is actually passed.

Terry McBride, a member of Advocis, works with Raymond James Ltd. (RJL). The views of the author do not necessarily reflect those of Raymond James Ltd. (RJL). Information is from sources believed reliable but cannot be guaranteed. This is provided for information only. We recommend that clients seek independent advice from a professional adviser on taxrelated matters. Securities offered through Raymond James Ltd., member of the Canadian Investor Protection Fund. Insurance services offered through Raymond James Financial Planning Ltd., not a member of the Canadian Investor Protection Fund.