Did You Miss Your Tax Filing Deadline for 2020? Here’s what you should do next!
September 14, 2020
Missing out important tax filing deadlines for 2020 will certainly lead you to face some consequences in terms of paying high-interest charges & the CRA penalties. There are certain benefits, rebates, and tax credits that you can claim in your tax filings including child benefits, trillium benefits, workers’ benefits, property & sales tax credits, GST/HST credits, and donations, etc. But if you fail to file your tax returns, the CRA may stop you from getting the benefit of your tax credits. Therefore, don’t delay too long in filing your CRA taxes and make sure that you are claiming the right amount of tax refunds & credits. Moreover, don’t leave your tax credit money with the government; you can always use that money in investing in your RRSP account.
If you are a potential client for the mortgage, you must furnish your T1 General Return so that your mortgage application can be approved without any delay. If you have missed out on your tax filing deadline for 2020; there is nothing to worry about – you need to sit with your CPA and plan to mitigate the potential impact of your delayed tax returns. Delay in filing your tax returns allows you to prepare all necessary CRA forms that will enable you to claim for certain benefits and tax credits.
Before you file your delayed tax returns, you need to know how interest charges and CRA penalties can affect your overdue balances. You also need to know what CRA benefits, rebates, and tax credits can be availed at the time of tax filings.
Interest & Penalty Charges – It is important to know that missing out tax filing on the balance owing for the previous year taxes, the CRA will charge compound interest daily. Additionally, the CRA will charge interest on the penalties starting from the day after the tax filing due date. If the tax is due on a last year tax filing and the due date has been expired, the CRA will charge you a late-filing penalty. This penalty will be charged 5% of the balance owing on the previous year tax return, plus 1% of the balance owing for each full month your return is late.
Canada Child Benefits (CCB) – The person who is primarily responsible for the care and upbringing of the child should apply for the CCB. The CRA makes the CCB payment on specified dates. It is a tax-free monthly payment made to eligible families to help with the cost of raising children under 18 years of age. Your CPA will guide you on how to apply CCB using the RC66 form and further guide you in the process of receiving the CCB payment on a specified date.
Trillium Benefits – If you live in Ontario, you need to know that Trillium benefits combine 03 credits to help pay you for the energy costs as well as sales and property tax. You need to be eligible for at least one of the 03 credits to receive the benefit. It is the responsibility of your CPA to prepare your tax documents and enable you to get trillium benefits using the 5006-TG ON – BEN form.
Canada Workers Benefits (CWB)– The Canadian Workers Benefit is a refundable tax credit that is eligible to those who work but they earn a low income. For those who are self-employed and earning low incomes, they can be eligible for workers’ benefits. You may apply for CWB using 5000-Schedule 6 – CWB.
Property & Sales Tax Credits – If you are eligible for the property & sales tax credits, it can be received even if you pay no income tax. Property & sales tax credits assist people with low incomes as both are refundable tax credits. You need to arrange all the necessary documents to apply for the property and sales tax credits.
GST/HST New Housing Rebate – If you are eligible for a new housing rebate for some of the GST/HST paid on the purchase of new housing or substantially renovated housing, you may be entitled to claim under GST/HST new housing rebate. To claim the GST/HST new housing rebate, you need to file Form GST190. This form requires you to provide claimant information, house information, rebate calculation, and other important information that your CPA must be familiar with.
Home Accessibility Tax Credit (HATC) – Up to $10,000 of expenses incurred for home renovations can be claimed under the HATC but those renovation expenses must improve your home’s safety and also improve your home’s accessibility for Canadians who are over 65 years of age. Your CPA can get you to achieve this tax credit if you provide all relevant documents and invoices for such expenses.
GST/HST Credits – If you have paid HST on taxable supplies more than the HST you collected; you would be eligible for HST credit. You can get the HST credit at the time of filing of HST return. HST credit is a non-taxable amount that is paid 04 times a year to all eligible HST registrants.
Donations – In some cases, you can get a quarter of your donations back to you at the time of filing your income tax. All you need to do is to share the evidence of your approved donations and your CPA will get you some part of your donations back to you.
In the end, the bad news for missing the tax filing deadlines is that you will be charged interest and penalties on the late filing and you can also miss the chance of getting the CRA benefits and tax credits. The good news is that you can still file your taxes; the sooner you file, the less you will pay interest and penalties. If you missed out on your tax filing deadlines for 2020, you need to take immediate action to file your taxes. If you find it difficult to manage your CRA taxes or the late filing of your taxes, GTA Accounting will assist you in streamlining your taxes and help you in getting all eligible benefits and tax credits. Please contact us to see how we can help.