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Need motivation to file on time?

A deadline that no taxpayer should ignore is now just weeks away: April 30 is the last day to file your return for the 2012 tax year, either electronically or by mail. There are so many reasons to file on time, yet many people still procrastinate. We’ve pulled together what we think is pretty compelling information to help motivate you to hunker down this month and get it done.

Are you receiving government benefits? Filing late could hold up payments owed to you, like the Child Tax Benefit (including those from certain related provincial or territorial programs), GST/HST credit (including any related provincial credit), and Guaranteed Income Supplement. It could also delay Old Age Security payments, or a decrease in OAS repayments if your income declines.

Even if you can’t pay your bill, by filing on time you’ll at least avoid the late filing penalty of 5% on the balance owing, plus 1% for each month your return is late, up to 12 months. Get your return in on time, and you’ll pay just 5% interest a year compounded daily on the balance. And while self-employed individuals (and their spouse) have until June 15 to file, if you do owe tax, Canada Revenue Agency will charge interest as of May 1.

Late filers are subject to greater scrutiny by the CRA and more punitive fines. If you’ve filed late in the past, the late-filing penalty doubles – up to 10% of the balance owing, plus 2% per month to a maximum of 20 months.

It’s also important to accurately report income from all T3, T4 and T5 slips. Again, if you are found negligent in this respect, and also failed to report income in any of the three preceding tax years, you could face penalties on the missed income of up to 20% in combined federal-provincial tax. Penalties may apply even if your omissions were inadvertent.

Tax filing is a task that comes around every year and does not go away if neglected. By completing your tax return on time and with care, you may save money, keep government payments coming in and also deflect unwanted attention from the taxman. What’s more, it clears your mind so you can focus on more pleasant things – like the warmer months and holiday season ahead.

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