Accounting | Tax

5 last-minute tax-filing tips

Here’s what just-in-timers need to know in order to nail the fast-approaching deadline

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Young lady using her laptop to file her income taxes online, while in her livingroomGetting organized is one of the first things you can do in order to help you meet the tax-filing deadline. (vitapix/Getty Images photo)

If you’ve yet to file your taxes, take comfort in knowing that you’re not alone. According to an H&R block survey of 1,522 Canadian adults in 2017, 11 per cent of Canadian tax filers planned to submit their return within a week of the April 30 tax deadline.

Here are a few tips to help you nail the deadline—and get ahead of the game for next year.

GET ORGANIZED

“It’s the most important thing,” says Marissa Verskin, tax partner at Crowe Soberman, a Canadian public accounting firm. “Make a file folder for all your slips,” she suggests. “The last thing you want is for something to slip away and you miss out on a deduction.” [For more tips on being prepared, see these tips from CPAs]

SEEK PROFESSIONAL HELP

Many tax preparers will share a tax questionnaire and/or a checklist that will help you through the process. Verskin says Crowe Soberman’s questionnaire asks key questions about life events that may have occurred during the previous year. For example, if you got divorced, sold a home or had a child, your tax situation will be affected, and you’ll need to collect certain documents to indicate those changes.

If your income qualifies as modest and your return is fairly simple, consider visiting a free tax clinic in your area to get assistance in preparing your return.

ESTIMATE YOUR TAXES

Though self-employed individuals (and their spouses) aren’t required to file tax returns until June 17, 2019, they must pay their tax balance by April 30. Most taxpayers in this situation either complete their return before the April deadline or use their returns from previous years to estimate a payment.

The same estimation method works for the last-minute filers who aren’t self-employed but simply run out of time to complete a return before the deadline, says Amanda Mills, owner of Artbooks, a tax preparation firm that serves artists and creative entrepreneurs.

You’ll avoid paying a penalty if there is no balance owing. But if a penalty does apply, it can be five per cent or more, which can amount to almost the interest for a whole year even if you pay it a week later. The solution? File the return on time with what you have already.

“The first thing I’d do is look at this year versus last year,” she explains. “Did you have a better year or a worse one? Look at the percentage you paid last and use that same percentage on your income this year.

ARRANGE A PAYMENT PLAN

Can’t pay your total balance? File your return anyway. 

“Sometimes you can arrange a payment plan,” says Verskin.

To propose a payment plan you can consistently stick to, consider using Canada Revenue Agency’s payment arrangement calculator, which takes into account your current financial situation to help you propose a reasonable payment plan.

SET REMINDERS FOR NEXT YEAR

One way to keep that schedule is to set reminders on your phone that remind you in plenty of time to start the process. Start with a reminder to gather your T-slips in February.

“At the end of the day, it’s a schedule you have to keep in order to file on time,” says Verskin. 

Another option is to follow the Canada Revenue Agency on Twitter. The agency posts helpful reminders throughout tax season.

IMPROVE YOUR TAX KNOWLEDGE

Do you procrastinate doing your taxes because you don’t really understand them? Consider contacting CPA Canada for a financial literacy session in your community. A CPA volunteer can help you understand tax laws and explain effective tax strategies using simple language.