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Wednesday, April 30, 2008

Good news and bad news on taxes


The good news...

570 News is reporting that CCRA (they’re still calling it Revenue Canada) has extended the deadline for online tax return filings to May 6.  But anyone owing money still has to file by (correction: has to submit the money by) midnight tonight to avoid paying penalties.

Now the bad news...

The Fraser Institute is reporting that the total tax bill of the average Canadian family has increased by more than 1,700 per cent since 1961. (You can find this information in Tax Facts 15.) Add the cost of regulatory compliance (12% of GDP) and monetary inflation (currently also at 12% annually) to the mix, and it’s no wonder Canadian families can’t get ahead.

Posted by Matthew Johnston on April 30, 2008 in Canadian Politics | Permalink


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"570 News is reporting that CCRA ... has extended the deadline for online tax return filings to May 6. But anyone owing money still has to file by midnight tonight to avoid paying penalties."

So in what sense have they extended the deadline? If they owe you money you don't have to file at all, let alone on time. In fact, the only requirement to file is if either you owe them money or they have sent you a letter telling you you must file. There is no punishment for filing late - even years late - if you don't owe them anything. So it looks like the extension of the deadline announcement serves only to confuse people who do owe money into filing late and thus being hit with a penalty. A job well done!

Posted by: Fact Check | 2008-04-30 3:21:54 PM

Actually, I created the confusion. If you owe, you have to submit the money by midnight tonight, but you can file online until the 6th without late filing penalties. How you know what you owe until you file is a mystery to me.

Posted by: Matthew Johnston | 2008-04-30 3:33:35 PM

The Income Tax Act clearly states that NO monies are legally payable until you receive a Notice of Assessment. As your tax return is a self-assessing document, an assessment is not deemed to exist until you file it or until Revenue Canada
issues a Notice of Assessment.
If they try to put it over on you, just tell them to fuck-off. ( word used to recognize Fat Check's post on another thread.)

Posted by: gerry | 2008-04-30 3:48:02 PM

Filing is not optional. There is punishment for filing late. As MJ says, until you file you don't know how much you owe. Revenue Canada won't come after you for a few years, but when they finally get around to it you're in deep trouble. If you had money owing it will be eaten up by penalties. If you owed money the interest and penalties are nasty.

Posted by: dp | 2008-04-30 3:51:22 PM

My point exactly, dp.
Don't pay until you file. If you file late then you are subject to late-filing fees. If you are given the opportunity to E-File as late as May 6, then do so, but there is no statutory obligation to pay until the self-assessment is submitted.
And remember, you can never go to jail for not paying, but you can for not filing.
And yes, it may take a few years for them to catch up to you. If you owe less than $2500. chances are they will never bother you, except for computer generated letters.
Just keep filing.
Here's another tip. If you are NOT self-employed but get a wage or salary, they will not consider you a threat because it is assumed that taxes were deducted at source and they probably owe you a refund.

Posted by: gerry | 2008-04-30 4:03:30 PM

There's never a shortage of experts ready to give advice. A few years ago a friend of mine was convinced by a co-worker that he had 3 years to file his return. I couldn't convince him otherwise. The same genius also advised him to buy RRSPs, then cash them in after the year end. When I told him the tax would be collected immediately, he replied "not according to (the co-worker)".

It's hard enough figuring out how to do your taxes without all the misinformation out there. I haven't done my own taxes for 10 years, but my accountant always keeps me on the straight and narrow. For the tiny fee she charges, I throw in my kids returns as well. Accountants have to make a living too.

Posted by: dp | 2008-04-30 4:33:32 PM

>"For the tiny fee she charges, I throw in my kids returns as well. Accountants have to make a living too."
dp | 30-Apr-08 4:33:32 PM

Another good thing about accountants is that they can actually bad mouth the Judases, you'd get in trouble, when they try to collect their commission by convincing you to pay more than you have to.

My accountant does my company taxes as well as the taxes for those in my household.

He's worth every penny of it.
He considers it an act of patriotism to deprive the Ottawankers of every penny he can.

Posted by: Speller | 2008-04-30 4:45:46 PM

Now , now folks,let's not complain about the tax system. Try to remember all the wonderful programs that we are funding, like the gun registry, anti drug,drink,smoke,eat too much programs.Don't forget all the tree hugger programs that your hard earned tax dollars are funding and the new carbon taxes that are pending.I could give you countless more reasons but by now I'm sure most of you are ashamed for not wanting to pay promptly for all the great causes the government deems so valuable.

Posted by: peterj | 2008-04-30 5:58:04 PM

"If you owe, you have to submit the money by midnight tonight"

No, you have to FILE by midnight, whether or not you make full or partial payment with your return.

There is a 5% penalty for FILING late (if you owe). The penalty for PAYING late is 1% of the balance per month, to a maximum of 12 months.

Sorry for the caps. I can never remember how to do the italics, etc.

Posted by: Joan Tintor | 2008-04-30 6:18:06 PM

I guess my original post was accurate. Here's what Canwest News is reporting:

"OTTAWA - A tax-filing deadline extension announced Wednesday will only apply to taxpayers whose efforts to file their returns over the Canada Revenue Agency website in recent days have been frustrated by technical obstacles, the tax collector says."

"The regular deadline of midnight Wednesday remains in force for people who owe taxes or want to mail or drop off a paper return, according to the agency, and financial penalties could apply if the returns are late."

Posted by: Matthew Johnston | 2008-04-30 6:31:46 PM

I hate tax returns, I tax rebates, I hated mail in rebates period. Listen, just don't take the money.
Tariffs really are best way for the central state to do the minimal things like guard the border and print money.
Other places flat taxes, with a simple filing nothing taken off your check pre-emptively; no refunds, caps on it limitations of collections and so on.


Gölök Zoltán Leenderdt Franco-Assisi Buday
"I've inherited an unbelievable bag of shit!" -John N. Turner, upon taking over for Trudeau

Posted by: Gölök | 2008-04-30 6:33:05 PM

With respect to the second part of the original post -- the 1,700 per cent increase in family tax bills since 1961 -- is it any wonder that both spouses now have to work and we have children being raised by day-care hirelings. All so governments can bribe us with our own money.

Posted by: JMD | 2008-05-01 6:26:42 AM

Sorry folks (if any of you are still around): my remarks dealt with us old fart paper filers, not you whippersnapper e-filers.

Anyhow, I hope everybody filed and/or paid in time. Whenever that is. Or was.

Posted by: Joan Tintor | 2008-05-01 6:52:07 PM

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Posted by: rconway | 2008-06-02 4:57:25 AM

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