It is personal income tax season once again. Given increasing interest rates, don’t overlook the importance of filing your taxes and paying balances and instalments on time, as interest assessed on insufficient payments can be significant.

Tax Filing Deadlines — The general deadline to file your 2023 personal income tax and benefit return is April 30, 2024. For self employed individuals and spouses, the general deadline is June 17, 2024 (the usual filing date of June 15 falls on a weekend). However,
any taxes owed must be paid by April 30, 2024.

Late-Filing Penalties — If a return is filed late and a balance is owing, the late-filing penalty is a minimum of five percent of any balance owing, plus one percent of the balance owing for each full month that the return is late, to a maximum of 12 months.

Interest Charges on Unpaid Balances — Unpaid balances will accrue compound daily interest at the prescribed interest rate. For Q2 2024, the prescribed rate (calculated quarterly) on overdue taxes stands at a very substantial rate of 10 percent.

Keep Good Records
Remember that both individuals and corporations are required by law to keep tax records for six years from their filing date. The CRA may request these records for audit purposes. The timeframe for recordkeeping may be extended for documents essential in determining a
person’s future tax obligations.

Here are some other tax season reminders:
Claim all credits/deductions. Keep in mind that tax rules change annually so the support of a tax expert may be helpful. There were very few credits/deductions that were introduced for the 2023 tax year; the multi-generational home renovation tax credit was a notable addition, allowing a tax credit for certain renovation costs when creating a secondary unit so that qualifying individuals (seniors/disabled) can reside with their relations. However, consider that changes to your personal situation can also change eligibility for credits previously not claimed.

Reporting requirements can change. This may be due to changes to the CRA rules. For instance, for the 2023 tax year, the CRA is no longer offering the temporary “flat-rate” method to claim employment expenses for employees who worked from home. Employees will be
required to use the detailed method to claim home office expenses. The updated CRA Form T2200 must be completed by the employer in order for the employee to deduct expenses from their income. Consider also the new reporting requirements for trusts, which now include bare trusts. Changes to your circumstances may also expose you to new reporting obligations. As a reminder, if you owned specified foreign property with a total cost of C$100,000 or more at any time during 2023, you are required to complete CRA Form T1135. Or, if you sold your principal residence in 2023, don’t forget that this must be reported on your tax return. As always, consider speaking with a tax advisor to ensure you’re claiming all of the credits and deductions to which you’re entitled and completing all of the required reporting obligations.

https://www.canada.ca/en/revenue-agency/services/tax/prescribed-interest-rates.html