Morningstar Money Challenge: Day 15

Today’s Task: Tax!

Ruth Saldanha 19 November, 2020 | 3:28PM

Tax preparer office


This article is a part of a month-long Morningstar Money Challenge. You can find the details here.

Every year, around the middle of April, I groan. It’s tax time again, and there’s nothing any of us can do about it. We have to file our tax returns every year. And today’s task revolves around that. Making sure your tax returns are filed, and you’re maximizing all you can with the taxman.

The Canada Revenue Agency (CRA) has a guide on taxes that explains the basics of what taxes are, and how to file your annual tax returns. It is essential to file returns, especially if you want to get various tax benefits.

Usually, the deadline to file is April 30. As our tax expert Matthew Elder explains, if you miss the deadline, all sorts of bad things can happen. If you have an unpaid tax balance after April 30, you will be charged a late-filing fee of 5% of the amount owing, plus an additional 1% for each full month the return is late. You also will be charged interest on any unpaid income tax, as shown on the notice of assessment you receive from the Canada Revenue Agency after you file your return. Interest, on a daily compounded basis, is charged as of May 1 at the CRA's prescribed rate, which currently is 5% annually. The CRA sets interest rates each calendar quarter; these are available on the CRA's website.

Before you start, here is a list of Tax To-Dos.

If you don't owe any tax, you are theoretically off the hook. But if you are eligible for various credits and benefits, such as the GST/HST credit or the child tax benefit, you must file a return to receive such payments. The longer you postpone filing, the longer the delay.

No matter your situation, we have a way to help. Our extensive additional reading section for tax provides tips, how-to guides, and an assortment of other tax-related questions that could come up, whether you’re starting out, you’re a mid-career professional, or you’re close to retirement!

Additional Reading: Tax Tips for (Almost) Everyone

All Season Tax Tips
Tax Tips for the Self Employed
Tax Saving Tips in Retirement
Tax Reporting Tips
Holiday Season Tax Tips
Tax Filing Tips for the Tardy

Additional Reading: How-To Guides

How to Report Investment Income
How to Improve Taxable Investments
How to Calculate and Report Capital Gains
How to Come Clean to the Tax Man 

Additional Reading: Miscellaneous!

Millennials: Maximize Your Tax Returns
Sold Home? Tell the Tax Man
Tax Return Traps to Avoid
Tax and Your Car
Tax-Deferred is Not Always Tax Saved

About Author

Ruth Saldanha

Ruth Saldanha  is Senior Editor at Morningstar.ca. Follow her on Twitter @KarishmaRuth.

 
 
 

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