It’s important to file your personal income tax and benefit return on time, and make any payments by due dates. There may be benefits or credits you are eligible for, and you can avoid penalties and late fees.
You can manage your taxes on My Account, get updates on the status of a refund or a payment, or change your personal information. Given the higher income pharmacists tend to achieve, it’s crucial for them to research eligible deductions and credits to reduce tax liability, as well as for them to avoid late penalties and interest charges.
Key Benefits and Credits
There are a few benefits and credits you should be aware of:
- Canada Carbon Rebate
- Canada child benefit
- Child disability benefit
- First Home Savings Account
- First-Time Home Buyer’s Tax Credit
- Home Buyers’ Plan
Filing Deadlines
The deadline to file your taxes this year is April 30th. However, if you or your spouse or common-law partner are self-employed, you have until June 17th to file your taxes.
Payment Deadlines
The deadline to pay your 2023 taxes is April 30th, 2024. Regardless of your filing deadline, if you owe taxes for 2023, payment is due by April 30th, 2024.
First Home Savings Account Delays
The CRA has experienced some processing issues with tax returns where a First Home Savings Account (FHSA) was opened in 2023. If you opened an FHSA account last year, you can expect a delay in your tax return being processed.
Canada Carbon Rebate Payments
If you electronically file your taxes by March 15th, 2024, you can expect to receive your subsequent Canada Carbon Rebate (CCR) payment, which used to be known as the Climate Action incentive payment, on April 15th, 2024. However, if you file after this date, you will generally receive your CCR payment within six to eight weeks after your tax return has been received and assessed.
Interest and Penalties
If you fail to pay your taxes on time, you’ll incur interest charges on the outstanding amount. Furthermore, if you submit your tax return late and have a balance owing, you’ll face a late-filing penalty. If you have a tax balance owing for the 2023 tax year and do not pay the balance by the April 30th deadline, the CRA will charge compound daily interest on the unpaid amounts from May 1st, 2024, including those owing from a reassessment of your return.
Interest Rates for the Second Calendar Quarter
The interest rate applied by the CRA to current or past due balances can change every three months, in line with prescribed interest rates. The rates for April 1st, 2024 to June 30th, 2024 will be:
- Income tax: the interest rate charged on overdue taxes, Canada Pension Plan contributions, and employment insurance premiums is 10%.
- The interest rate for corporate taxpayer overpayments is 6%.
- The interest rate for non-corporate taxpayer overpayments is 8%.
- The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans is 6%.
- The interest rate for corporate taxpayers’ pertinent loans or indebtedness is 9.04%.
Tax Instalment Penalty
If you were required to pay tax instalment payments, and they are overdue or incomplete, you may be charged a penalty. This penalty is applied only if your instalment interest charges for 2024 exceed $1,000.
Penalty For Filing Your Tax Return Late
In addition to the interest charges you have to pay on amounts owing if you do not pay on time, if you file your tax return after the due date and have a balance owing, you will also be charged a penalty for filing late. Filing your tax returns late also leads to delays to any benefit and credit payments.
This means that even if you cannot pay your balance owing in full, you should still be sure to file on time to avoid being charged this late-filing penalty.
The late-filing penalty is 5% of your balance owing for 2023, plus an extra 1% for each full month your return is filed late, up to a maximum of 12 months. However, if you were charged a late-filing penalty for any of the years 2020, 2021, or 2022, and the CRA requested a formal demand for your return, the penalty for 2023 will be higher. In this case, the penalty will be 10% of your balance owing, with an additional 2% added for each full month your return is late, up to a maximum of 20 months.
Need Help Filing Your Personal Tax Return?
The tax experts at Pharma Tax specialize in helping pharmacists file their tax returns to minimize what they pay in taxes. We also help make sure you meet all requirements to avoid paying penalties and fines, for hassle-free taxes.
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