It’s that time of year again! The snow is melting, the sun is out longer, the dust is hanging in the air (we don’t talk about what else is mixed with the dust…) and….
Ok, it’s tax time. That’s arguably less thrilling.
In 2017 (sorry, that’s a while ago, but there aren’t really any numbers posted since then), HR Block reported that two of five Canadians hadn’t filed their taxes with only two weeks left to go on the deadline. About 55% of Canadians file a few weeks before the deadline, 23% file at the deadline, and 19% file well ahead of time. And of course, there are people who don’t file for many months and risk penalties, fines, and even jail time. (Though that last one is incredibly rare. The CRA would rather work with you to get their money back, to be honest).
If you’re the type who puts off filing until the last second, you may be causing yourself more grief than anything else. After all, the CRA doesn’t really care if you file on April 30 (as long as you do), but you are shorting yourself on getting your return in decent time and may be causing trouble for benefits as well, especially if you don’t file every year. So why should you be getting your taxes over with as soon as possible and do them every year?
That Fat Tax Return…
The average return this year is a whopping $2,094! (so far anyway). That’s a lot of money to be leaving on the table simply because you couldn’t be bothered to file your taxes. If you have a fairly straightforward tax situation (EI perhaps, plus a part time job, or a full time job), then that’s around $2,000 for about an hour of work with a good electronic filing program. I don’t know of many jobs that will pay you $2,000/hour!
Obviously your results will vary, but many people this year are eligible for a pretty nice refund due to tax rates changing, medical, and family allowances changing. And if you file electronically, you usually see that money in about a week. Not bad at all!
If you decide to get someone else to do it (I don’t blame you), then you can be eligible to get that money right away or simply wait for it to be direct deposited. Income tax filing averages around $35-$50.00, depending on your situation. (Self employed/business costs a lot more, obviously).
Keep in mind that if you make below a certain amount, your filing will be much cheaper (or even free if you do it yourself and make below the poverty threshold). It’s also free if you are under the age of 25.
So even if you do pay to have someone else do your taxes (or pay for the software), you’re still looking at making a decent amount of money for some work. And a lot of tax software is pretty easy to use nowadays!
Benefits
All of the benefits you receive are calculated based on the previous year’s return. This includes GST rebates, OA security, medication payment help, living supports, disability support, Canadian workers benefit, and family allowance. EI can also look at your tax returns if you don’t have enough pay stubs to show, (and they use this information to calculate your benefits), and mortgage lenders look at tax returns to decide if you make a good enough income. Without this information, it’s a lot harder for you to get your benefits (well, impossible actually) and lenders are less likely to give you the loan you want. It also impacts your RRSP contribution limits. Sure, these things may not mean a lot now, but it’s important to look to the future.
Even if you don’t care about these benefits, not filing your taxes can cost you a lot of money in fines and penalties, so better to get it done.
I’m a Student
You still have to file taxes. Even if you make nothing, you still have to file taxes. And this includes if you worked gigs, for cash, or freelanced. Any money you make has to be claimed. If you didn’t make any money, you still have to say so. They get you coming and going! But at least if you make no money (or hardly any), you’ll get more in benefits since you will be well below the poverty line.
Where Can I File My Taxes for Free?
If you’re low income, the last thing you want to do is pay to have the government rifle through your finances (I’m with you on this). So where can you go to get them done for free?
- Free filing software: TurboTax, Wealthsimple Tax, CloudTax, StuidoTax, H&R Block Online, TaxTron, and GenuTax all have free filing if your tax situation is simple (ie, no rentals, tuition, family, business expenses, not self employed, etc.) If your situation is basic, don’t pay someone for frills you don’t need! Ufile.ca also has a free version for people who qualify (usually based on simplicity and income level)
- Free tax clinics. These are community organizations who use volunteers to complete and file your taxes for free, over the phone or by video conference, as well as in-person. In Prince George, for example, The Salvation Army PG, IMSS, St. Vincent de Paul and CVITP Income Tax Service, all have free tax clinics, as well as the Prince George Council of Seniors. Most of them cater to seniors, Indigenous people, immigrants, people with disabilities, seniors, those on social assistance and students, but IMSS has a free clinic for anyone.
Now, this all assumes that you have a pretty basic tax return and a low income. If your tax return is weird (rental income, tuition, self-employed, etc), then you’ll have to pay for it. But if you don’t have to pay for getting your taxes done, then don’t! There are lots of ways to get it done for free.
It’s springtime. The clocks have changed (sigh), the air is full of dust, the ground is mostly snow free, the temperatures are climbing, and the taxes are due. Don’t wait until the last minute (or beyond) to get them done. File them, get your return, and move on with your life!
