Vice-President of Sands & Associates and Licensed Insolvency Trustee Blair Mantin was a guest on CTV Vancouver’s ‘News at Noon’ today. While tax time can seem intimidating to many filers (especially if you owe money), the season for tax returns is upon us. Blair shares some key tips to help filers get through this year’s tax time.
Watch the clip here, and read more below:
1 – Get it filed
- There are only a few circumstances where an individual is not required to file a return for a given year. In just about every case, it is in your best interest to file! Why? Canada Revenue Agency (CRA) views filing tax returns as a civic obligation – essentially the cost of belonging to society.
- If you do not file returns or file late, you may miss out on money from the government!
- GST credits, Canada Child Benefits, OAS and MSP Premium assistance, to name just a few key items, are based on your tax returns and you may not receive government benefits, or be eligible for a reduction in MSP premiums unless you file your taxes each year.
2 – Know the deadlines
- It’s important to file on time and to pay any balance owing on time to avoid interest charges and/or collection activities against you.
- Tax filing deadline is April 30, 2017 – unless you are self-employed, you need to have your returns filed by this date. This is also the due date for taxes owing for 2016. If you owe CRA money on your tax returns, they expect you to submit corresponding payment upon filing.
- For self-employed individuals – the filing deadline is June 15, 2017
- It’s important to note that any balance for taxes is due April 30, 2017, even though the return has not yet been filed! Self-employed individuals are expected to estimate their tax liability and make a payment prior to their return being completed
- Interest charges can be significant! Penalty for amounts not paid by April 30, 2017 is 5% of amount owing, plus 1% monthly thereafter.
3 – Know your options for tax debt
- If you’ve filed your returns and ended up with a bill that you can’t pay; or are scared to file your returns because you think you’ll owe money, there is hope!
- Owing money to CRA is serious, but far from a hopeless situation
- CRA has more power than nearly any other creditor – For example: Visa or Mastercard is required to sue you before they can take your wages or seize your assets. CRA has no requirement for legal action first – if you ignore them, they can go straight to your employer and take up to 30% of your wages until they are paid in full. They can also register a charge against your house or condo requiring their debt to be paid when you refinance or sell.
- It’s incredibly important to be proactive and know your options:
- There is a single way of ‘making a deal’ with CRA for unpaid taxes – filing a Consumer Proposal through a Licensed Insolvency Trustee
- Consumer Proposals stop all collection activities, halt all interest and finance charges, and result in a payment plan for the amount of the tax debt you can afford to pay back, in full settlement of the debt
- For example, if someone owed $50,000 in back taxes over several years, a Consumer Proposal might succeed in reducing the total debts payable to $15,000, with monthly payments of $250/month until the $15,000 is paid off.
With over 29 years of experience, Sands & Associates is BC’s largest firm of Licensed Insolvency Trustees focused exclusively on assisting individuals and small businesses achieve their “debt free” goals.