Andrew Goldman has been writing for over 20 years and investing for the past 10 years. He currently writes about personal finance and investing for Wealthsimple. Andrew's past work has been published in The New York Times Magazine, Bloomberg Businessweek, New York Magazine and Wired. Television appearances include NBC's Today show as well as Fox News. Andrew holds a Bachelor of Arts (English) from the University of Texas. He and his wife Robin live in Westport, Connecticut with their two boys and a Bedlington terrier. In his spare time, he hosts “The Originals" podcast.
The tax payment deadline is a date that every Canadian adult likely knows by heart. That date is usually April 30. However, in 2022 it falls on a Saturday, so the Canada Revenue Agency has declared the tax deadline to be May 2, 2022. If you are self-employed and have a balance owing, it is due by May 2, 2022, however, the filing deadline is June 15.
The CRA considers your tax return received on time if it was filed before or on May 2, 2022 (or June 15 for self-employed people). If it is filed after the filing deadline, you’ll have to pay penalties.
If you don’t owe any taxes to the CRA but are filing the tax return because you expect a refund or your taxes were less than $2 for the year, you can file taxes after the deadline. There are no penalties on late filing if you don’t owe any taxes to the CRA.Wealthsimple Tax is a simple way to file your taxes. File your return with confidence it’s done right, and pay what you want—there’s no catch.
Who should file taxes
Income tax is not the only reason why you need to file taxes. Here are other situations that require you to file taxes:
You have to pay capital gains tax on a property that you sold at a capital gain during the year.
You have to pay Canada Pension Plan (CPP) premiums or Employment Insurance (EI) deductions if you are self-employed
You are required by the CRA to repay Employment Insurance (EI) or Old Age Security (OAS) benefits.
You have to repay Registered Retirement Savings Plan (RRSP) withdrawals because you used the Lifelong Learning Program (LLP) or Home Buyer’s Plan (HBP) for withdrawals.
You want to split your pension funds with your spouse or common-law partner.
You received advance benefit payments of Canada Worker’s Benefits (CWB)
You are obligated by the CRA to file taxes because you received a “Request to File” or “Demand to File” notice.
The Canada Revenue Agency (CRA) requires everyone who earns taxable income or meets the above requirements to file an income tax return regardless of their age or occupation. This also applies to the non-resident Canadians who receive income from sources in Canada. Students and seniors are also no exception to this rule. For example, if a 10-year-old is earning taxable income from self-employment, whether steady income or not, a tax return must be filed on their behalf.
Late filing penalties and interest
If your tax return is filed after the deadline, the CRA will charge a 5% late filing penalty on the amount of tax you owe to the CRA and an additional 1% every month that passes after the deadline, for up to 12 months. Plus a 5% interest rate (compounded daily) on the balance owing.
For instance, if your tax owing was $1,000 and you file taxes 12 months after the tax filing deadline: You’ll pay a late filing penalty of $50, an additional 1% penalty for each month passing after the due date of $120 (for 12 months) and interest of $59.98 on the overdue tax amount. So, you’ll pay $229.98 in interest and penalties.
If you don’t owe any taxes to the CRA for the year or you are expecting a tax-refund, late filing won’t result in penalties or interest.
Why filing on time is better
Even if you cannot pay your taxes on time, you should file your tax return before or on May 2, 2022. The CRA does not charge a late-filing penalty when the tax return is filed on time but without payment. Though you are required to pay interest payments on the balance owing for each month after the deadline.
Let’s say your taxes for the year were $1,000, but you couldn’t pay your taxes on or before May 2, 2022, so you filed the tax return on time and planned to pay the entire amount one month after the deadline. You’ll only have to pay compounded interest of $51.27 for late tax payment.
The CRA can cancel and waive penalties or interest for taxpayers who couldn’t file or pay taxes due to circumstances that were beyond their control.
How to file taxes
There are several ways you can file a tax return:
A NETFILE-certified tax software can be used to calculate and file taxes. You can use a product like Wealthsimple Tax, which is a free CRA-certified online tax filing software that allows you to file taxes easily. Using tax software is beneficial because information can be auto-filled and you can keep it saved in your account or save a PDF copy for future reference. The CRA will send your tax refund within 2 weeks if you use NETFILE to file your tax return.
Through a representative
You can authorize an accountant, employee, client, family member, or friend to calculate and file taxes on your behalf. You can allow a representative to file taxes by going to the “Authorize a Representative” page on CRA’s website.
Paper tax return
You can fill out a T1: Income Tax Return and mail it to the CRA. If you filed a paper tax return last year, the CRA will send you the income tax package through mail. However, CRA prefers electronic filing methods. If you file by mail, the processing takes longer and your tax refund might take 10-12 weeks.
Tax discounters are tax preparers that file your taxes and calculate your tax refund. They pay your tax refund at a discounted amount upfront. They receive your tax refund from the CRA later and the difference is their profit. They comply with the tax laws and the CRA conducts compliance programs regularly to ensure the tax discounters meet the responsibilities under the law.
Community volunteer tax clinic
Low-income taxpayers who have simple tax returns can allow a volunteer from a tax clinic to do their taxes for free.
Tax Deadline FAQ
In Canada, the tax season starts on February 21, which is when the CRA starts accepting tax returns. If February 21 falls on a weekend, then the tax season starts on the following Monday.
The usual deadline for filing taxes is April 30 or the next business day if April 30 falls on a weekend. In 2022, the tax deadline is May 2.
If you fail to file your tax return by the due date, the Canada Revenue Agency (CRA) will charge a late-filing penalty. However, if you filed late because of circumstances that were beyond your control, you can request CRA to cancel or waive the penalties.
If you miss the tax deadline, you should file as early as possible. The CRA charges a 5% late-filing fee on your balance owing and a 1% additional fee is charged for each month passed after the due date. Plus 5% interest compounded daily on the overdue taxes.
If you have been charged a late-filing penalty in the last 3 years (2018, 2019, or 2020), failing to file the 2021 tax return on time can result in a late filing penalty of 10% on the balance owing and an additional 2% on each month passed after the due date.
Employed taxpayers and self-employed taxpayers must pay taxes by May 2. Even if you cannot pay taxes, you must file on the due date to avoid a late-filing penalty. Upon late payment, you’ll be charged interest. You can reduce the amount of interest by making a partial payment.
No, the tax deadline is May 2, 2022.
If you don’t pay taxes and refuse to pay them, the CRA can take legal action against you to collect the unpaid debt. The CRA waits for 90 days after your notice of assessment to begin any legal action. In the meanwhile, your debt will accrue interest.
You can pay your owing balance to the CRA through:
“My Payment”: Log in to “My Payment” and go to “Payment Options.” Choose the option that you prefer to pay with—debit card, PayPal, or Interac e-Transfer.
Financial app: To pay late taxes online, you can also use your financial institution’s online payment app. Under “Add a Payee” select “CRA (revenue) – tax amount owing” to pay the owing amount.
Pre-authorized Debit (PAD): You can schedule future payments in My Account from your Canadian chequing account, authorizing CRA to withdraw pre-set amounts.
Wire Transfer: For taxpayers living outside Canada, who do not have a Canadian bank account, can make payments through bank wire transfer to the CRA.
PaySimply or Plastiq: To pay taxes with a credit card, PayPal or Interac e-Transfer use PaySimply or Plastiq.
Yes, you’ll be charged a late filing penalty of 5% on the amount owing, an additional 1% for each month after the due date, plus 5% interest (compounded daily) on the overdue taxes.
If you have failed to pay taxes on time in 2018, 2019, or 2020, you’ll have to pay a late-filing penalty of 10%, an additional 2% for each month that passes after the due date and 5% compounded daily interest on taxes overdue.
Not filing and paying your taxes to the tax agency is a crime. Although the vast majority of taxpayers who don’t file taxes do not end up serving jail time, tax evasion is a serious crime. The courts can punish tax evaders through fines of up to 200% of the tax amount owing and/or a prison sentence of up to 5 years.
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