When are Taxes Due in Canada?

Man doing taxes

When Are Taxes Due in Canada?

You can officially start filing your 2020 taxes on February 22, 2021. This day is also the earliest date that you can file taxes for previous years.

The deadline for most Canadians to file their taxes is April 30. If you are self-employed or have a partner or spouse who is self-employed, your deadline is June 15.

Last year, the federal government granted Canadians several extended deadlines to file their taxes due to the COVID-19 pandemic.

So far, in 2021, no extended deadlines have been issued, meaning the filing deadlines aren't likely to change if you have a good idea and plan on filing your return and pay any tax balance owed by that date.

Table of Contents

What do you need to file your taxes?

When you’re in your twenties, you may just be embarking on the process of building an emergency fund. Simply put, most experts agree that the desired amount to have in an emergency fund equates to around three to six months’ worth of expenses.

Of course, this means that there isn’t some magic number — instead there is only a number that makes sense for your lifestyle. This is made especially true by the fact that living expenses vary considerably depending on things like geographic location, family size, and also your personal comfort and risk assessment.

  • Employer tax slips (T4s)
  • Bank slips for interest earned in non-registered accounts (T5s)
  • Information on any COVID-19 benefits claimed in 2020
  • RRSP contributions amounts (issued by your bank in March)
  • Deductible expenses such as charitable contributions, union dues, and your home office
  • Your previous year's Notice of Assessment

In addition to these documents, you should also ensure your registration for the My Account feature with the Canada Revenue Agency (CRA) and that you have access to your login credentials.

This portal allows you to file your taxes online quickly. You should log into your My Account portal before preparing your taxes to ensure you set up direct deposit and that your current address is correct.

Having a My Account with the CRA allows you to Auto-fill your return with an online tax filing software, making the whole tax filing process just a bit easier.

Penalties for filling late

Filing your taxes is a pain, but filing them too late means you'll pay penalties, which is also painful!

There are two scenarios where you could file your taxes late: if you owe a balance and if you don't. Here's how each situation impacts the penalties you will pay.

Woman doing taxes

If your tax balance is zero or you receive a refund

If you file your taxes late but don't owe the government money, you won't have to pay any penalties.

If you owe taxes

If you file your taxes late and you have a balance owing, you'll pay an immediate filing penalty of 5% of your tax balance due, plus 1% of your balance per month for up to 12 months.

So, for example, if you file your taxes late and your tax bill is $4,000, here's what your penalties will look like:

Your 5% instant penalty will be: $4,000 x 5% = $200

On top of that, your monthly penalty will be 1% of the balance until paying the whole tax balance. In this case, you'll pay $40 per month.

If you have outstanding taxes from the year before, those tax balances will be subject to an increased filing penalty rate of 10% of your tax balance plus 2% per month up to a maximum of 20 months.

If you know, you will owe taxes this year and can't afford to pay. You should still file your taxes on time to avoid late filing penalties.

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Other important deadlines

There are a series of important deadlines for your taxes. Here's a quick list, broken down by type:

Official deadlines

The government of Canada sets out these filing deadlines, and you will incur interest and filing penalties if you miss them:

  • February 22: The first day you can file your taxes in Canada
  • April 22: Deadline to set up pre-authorized debit payments for 2020 taxes owing
  • April 30: Tax filing deadline for individuals with a balance owing

Bank, employer, and other deadlines

These deadlines relate to your employer and your bank, including registered accounts like RRSPs and TFSAs.

  • January 1: The first day of the new tax year
  • January 22: Efile is closed for maintenance
  • February 28: The last day for employers to issue T4s, T4As, and T5s to employees and the CRA
  • March 2: The last day to contribute to your RRSP for the 2020 tax year
  • December 31: The last day of the tax year CRA

Self-employed deadlines

If you run your own business, you have these additional essential dates to keep in your calendar.

  • March 15: Tax installment payments due
  • June 15: Tax installment payments due
  • June 15: Tax filing deadline for self-employed individuals
  • September 15: Tax installments payment due
  • December 15: Tax installment payment due

How to file your taxes in Canada

There are a variety of ways to file your taxes in Canada. We've broken them down below, as well as listed the pros and cons of each tax filing method.

Online Filing

The CRA is encouraging Canadians to file their taxes online this year. Not only does it help promote social distancing (since you can file at home), but it also gets your return assessed more quickly and helps you get your refund more quickly.

If you sign up for your My Account feature, you can use the auto-fill my return function to import most of your tax documents directly, and the majority of online tax software lets you file to the CRA directly with NETFILE.

While some online tax software is free, most software packages cost between $20 to $40.

Pros: The Good Stuff

Logo Fast, filing online takes about an hour

Logo Most online software is straight forward with plenty of guidance

Logo Reduces time to receive Notice of Assessment and refund

Logo Import your tax documents directly into your tax software

Cons: The Not So Good Stuff

Logo Adding bonus services like audit support and expert reviews can drive up the cost

Logo Requires basic computer/smartphone knowledge

In Person Filing

Some Canadians prefer to file their income tax returns in person.

Services like H&R Block are an excellent example of companies that allow you to drop off your documents and have a tax expert prepare your taxes on your behalf.

There are also community volunteer income tax programs that will help Canadians with a modest income prepare their taxes.

Pros: The Good Stuff

Logo A tax expert prepares your taxes, no tax knowledge necessary

LogoVolunteer programs are free

Cons: The Not So Good Stuff

Logo It can be more costly if you use a for-profit tax preparer

Logo Requires traveling to a physical location

Logo Refunds take longer to receive

Filing by paper

A final alternative is to mail a paper copy of your income tax return manually. This method will require you to have your income tax return completed either through an online software program, in-person, manually. If you wish to go the manual route, download a general taxes package from the CRA and prepare your income tax refund yourself.

Pros: The Good Stuff

Logo Cheapest option

Logo Useful if you do not have My Account set up

Cons: The Not So Good Stuff

Logo Your refund will take longer to process

Logo Filing your taxes yourself without the help of tax software could result in errors

Our Final Thoughts

Tax season generally isn’t a fun time for most Canadians. Still, suppose you leave your tax filing until the last minute.

In that case, you’ll turn a mildly annoying chore into an anxiety-filled experience of racing against the clock to track down your documents and receipts before the deadline.

The best way to ensure that the 2021 tax season is stress-free is to take the following steps:

1. Check your deadlines now

Determine which of the deadlines listed above apply to you, and mark them in your calendar. Then count back two weeks before tax filing time and put another notification in your calendar to give yourself plenty of time to get your documentation together and file.

2. Check your My Account status in February

Your My Account with the CRA will make filing your income taxes more manageable, but only if you have access to the account. Find your login information and make sure it is correct in February. If it is not valid, you’ll need to request a new access code from the CRA to reset your account, and that process can take weeks.

3. Gather your documents in March

Your employer should have issued your T4 by March, and your banks and other receipts should be available by then as well. Gather those documents in March, so you have them available at tax time.

4. Choose your filing method in April

Whether you choose online or in-person, decide how you will file your taxes in April and begin your return. Work on it a little at a time, and you’ll have it completed well before the April filing deadline.

Filing your taxes isn’t fun, but don’t add unnecessary stress by waiting until the last minute. Get started now, and you’ll thank us later!

Frequently Asked Questions

Yes, the Canada Emergency Response Benefit (CERB) is a taxable benefit, which means you will need to declare that income and pay taxes on it.

If you had federal or provincial student loans that charged you interest in 2020, you can deduct the interest only. If you have private student loans through a Canadian lender, that interest is not tax-deductible.

TThere are no consequences if you don't have a balance owing and don't file your taxes. If you do have a balance owing, not filing your taxes will incur the penalties we outlined above.

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