It’s officially tax time, so mark your calendars! Below are a few dates to keep in mind.
Deadline for filing personal taxes
April 30, 2020 WAS the deadline for filing personal taxes. However as a result of COVID-19, a new date of June 1, 2020 has been extended, and any amounts owing is due September 1, 2020. If you miss the deadline, the consequences for filing late is a 5% penalty on the tax balance and 1% per month on the outstanding balance. For example, if a person owes $2,000 in taxes over a 1-year period this is how it would break out:
$2,000 x 5% = $100; add to that the balance not being paid for 1 year $2,000 x 1% x 12 months = $240
A person could end up paying $2,340 in taxes, penalties, and interest!
Deadline for filing for Self-Employed/ Sole Proprietorship
The deadline to file taxes for self employed or sole proprietors is June 15. However, if you owe anything you will need to pay it by September 1, 2020 to avoid penalties and interest.
When can you start to file your taxes?
Revenue Canada starts accepting filing 2019 income taxes February 24, 2020.
When is the deadline for purchasing RRSP’s for 2019?
You can contribute to RRSP’s until December 31 of the year you turn 71. You can purchase RRSP’s for 2019 income tax return, until March 2, 2020.
How much RRSP’S can I or should I purchase?
On your Notice of assessment from Revenue Canada for 2018 there will be an amount called: RRSP contribution room for 2019. This is the maximum amount you can contribute towards RRSP’s for 2019.
If you owe money to Revenue Canada, consider paying yourself first and then purchase RRSP’s to reduce your taxable income.
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