It’s tax time again – and while the Canadian Revenue Agency (CRA) doesn’t strike fear in the hearts of Canadians the way the IRS does us neighbours to the south, it’s still a good idea to always file your taxes. Here are some good reasons why:
- Often, the government ends up owing you money. The government is always happy to take your money – so you should always try to get as much back (legally!) as you can!
- By filing, you can create RRSP contribution room, and get access to federal and provincial tax credits
- If you are late in filing your taxes, but do so before the CRA orders you to do so, you are more likely to avoid nasty things like gross negligence penaltiesw and possible tax evasion penalties
- As well – if you haven’t files for years and you owe taxes – interest accrues on both your outstanding taxes and the penalties for not filing your taxes.
- The consequences could end up being anything from filing for bankruptcy to house arrest or jail time (remember – that’s how they got Al Capone).
So – it’s no fun, but you might as well bite the bullet and file your taxes. I tend to wait to late in March to make sure I have all my receipts – and I start an envelope they all go in as soon as the first tax slip arrives. Make sure you keep track of things such as the following so you can get as much back as possible:
- RRSP contributions
- Medical expenses not reimbursed
- Commuting costs (may or may not be covered depending on your commute)
- Charitable donations
And always keep all your slips – even if you e-file! I keep everything for 7 years, just to be on the safe side.
Happy tax time!
Have you ever not filed? Why not, and were they any consequences?