What to do if you missed the 2016 CRA tax deadline
For Canadians, the 2016 tax deadline passed on earlier this month on May 1st. If you missed the deadline you may be subject to penalties or interest fees if you have money owing. If you missed the tax deadline, you will also likely delay the return of your tax refund as well. You’ll also have missed your chance to write off your 2016 RRSP contributions.
Obviously, these aren’t good. But they also aren’t necessarily bad. Here is what you can do if you missed the 2016 tax deadline.
If you own your own business, relax – your tax deadline is different
The May 1st tax deadline only applies to Canadians who do not own their own businesses. If you are an entrepreneur in Canada, your tax deadline is pushed back to June 15.
Your personal return may be different, and still will have required filing on May 1st, but your income tax return is delayed. Lucky you.
If you owe taxes, start preparing to file immediately
You can always file your taxes late, but it comes with a cost. If you missed the May 1st deadline, you need to start preparing your taxes. The sooner the better, as the longer you wait to submit your taxes, the greater the penalties and interest fees become.
You’ll need to fill out a couple of key documents in order to file your taxes. They are as follows:
2016 T1 – A general income form that you use to indicate your income, credits, and deductions. This is the backbone of your taxes and should be the first form you fill out.
Next, you’ll need one of the following: a T4 (if you are employed), a T4A (if you are retired), or a T4E (if you are on unemployment). All of these forms break down how much you were paid, through your different sources of income.
If you are an active investor, you’ll need to file a T5 as well. Your T5 is a Statement of Investment Income, which is used to calculate capital gains taxes.
Once you have all of these forms filled out to the best you can, it’s time to start pulling your receipts from the last year together.
Once you have filled out your income statements, you can move on to deductions and credits.
Collect your receipts from 2016. Applicable receipts include those for public transit, child care, costs incurred when moving and any medical expenses. The available deductions will vary by province so it will be worthwhile to examine what deductions you can use. The deductions available to those of us in BC can be found here.
If you have been contributing to your RRSP, these contributions are tax deductible. Be sure to include any statements regarding your 2016 RRSP contributions in your tax filing as it will reduce your taxable income.
Some other deductions will require specific certificates as well. For instance, some volunteer positions such as search and rescue personnel are entitled to a specific deduction to their taxable income. If you qualify for any of these, you’ll want to be sure to include those deductions when you file your taxes.
Research your available tax credits and apply them
Tax credits are available to many Canadians. There are many tax credits available to families, ranging from child care to children’s fitness programs. Each province has different tax credits available, so it will be important for you to look up your own provinces available credits.
For my British Columbia readers, click here to learn more about the available tax credits that you can take advantage of.
If you haven’t already, speak to a financial advisor
There is always money that can be saved, but it is easy to miss opportunities when filing your taxes on your own. Speaking with a financial advisor will help you ensure that you are maximizing your tax return and getting the most out of your wealth. Having a dedicated wealth advisor will protect and grow your savings as you file taxes.
So don’t feel pressured to submit your taxes immediately. Interest fees are charged on a month-by-month basis, so panicking and personally filing your taxes immediately may end up costing you more money than you save. Patience is key and while missing the tax deadline isn’t a great thing, it is not the worst thing to happen.
Thanks for reading!
If anything on this blog interests you further, please do not hesitate to reach out to me via email at [email protected] I’d love to talk about my financial services and advice in Vancouver, British Columbia’s lower mainland, and Canada in general.
- Brad Blair, CFP, CIM, FCSI, CHS.