With less than a month to go before the April 30 personal tax filing general deadline, 60 per cent of Canadians have yet to file their 2020 returns according to a new survey out this week from H&R Block Canada. The survey also found that one-in-three Canadians (34 per cent) report “dreading the 2020 tax season more than usual,” and one-in-four (26 per cent) say they are “clueless” when it comes to tax preparation and rely on tax experts to help them with their returns.
“It’s inevitably a challenging tax year for many Canadians to navigate. What’s important is resisting the temptation to procrastinate, and to seek expert help if you are not sure how to maximize your tax return,” said H&R Block Canada president Peter Bruno.
As of Monday, the Canada Revenue Agency had only received 9.1 million returns out of an expected 29 million personal returns expected to be filed this tax season. This is slightly behind last year’s pace, when the CRA had received 9.4 million returns by the same date, and quite a bit behind the pre-pandemic tax filing season of 2019, when 10.6 million Canadians had already filed by this date.
Why are Canadians stalling? According to the survey, a third (32 per cent) say that they simply have “not had the time” to file, and while 25 per cent say they are procrastinating just because “they hate filing their taxes.”
It’s likely to your advantage to file as soon as you can to get your hands on that tax refund, as each year approximately 19 million Canadians receive a tax refund when they file their returns. To date, of the eight million 2020 tax returns already processed by the CRA, 70 per cent showed a refund, with the average refund totalling $1,801.
Asked how Canadians planned to use their refunds this year, nearly a quarter (23 per cent) of survey respondents plan to use it for everyday essentials, 21 per cent would use it to pay off bills while 28 per cent plan to pay down debt or the balance on their credit card. Only eight per cent stated that they would use the money to book a vacation once COVID restrictions lift.
To help you file your return and perhaps get any refund owing to you faster, there are lots of ways to get assistance with your taxes, including online software, the CRA’s Community Volunteer Income Tax Program, and even from the CRA itself, which is offering extra support over the Easter long weekend.
For the 2021 tax filing season, there are over two dozen CRA certified tax software programs approved for use. All certified tax software also includes the ReFILE service, an online service that lets individuals (who use NETFILE) and professional tax preparers (who use EFILE) send online adjustments for tax returns previously filed for the 2020, 2019, 2018 and 2017 returns.
The certified software also includes access to Auto-fill my return, which allows individuals and authorized tax preparers to automatically fill in parts of the return with information that the CRA has available at the time of the request, such as T-slips, RRSP contributions and much more.
Some tax software also includes the ability to electronically file the T1135 Foreign Income Verification if you own foreign property (other than personal vacation property) whose total cost exceeds more than $100,000 at any point in the year.
Community Volunteer Income Tax Program
If you have a low to modest income and a simple tax situation, a volunteer may be able to complete your tax return for you, for free. And, this year, you may not even need to leave the comfort and safety of your home to do so.
The Community Volunteer Income Tax Program (CVITP) is a program that allows taxpayers with modest incomes and simple tax situations to have their returns filed on their behalf for free. With assistance from the CRA, community organizations throughout Canada operate on a volunteer basis to host tax preparation clinics and prepare tax returns for eligible individuals.
“When the pandemic hit, the (community) organizations were in the middle of their peak filing season,” explained Heather Daniels, director general of the benefit programs directorate at the CRA. “They all had to close due to the social distancing measures. We thought it was going to be a two week break at the time…. It took us a little bit of time to realize this isn’t going away, so, in May 2020, we announced the implementation of virtual tax clinics.”
With the virtual model, which continues into the 2021 tax filing season, volunteers can continue to assist individuals in filing their returns through virtual means, including via drop-off, video-conferencing and telephone clinic sessions. To date, over 3,200 organizations have registered to deliver CVITP clinics across the country and over 13,700 volunteers have been involved with preparing returns. By hosting a virtual clinic and embracing telephone and video-conferencing interaction options, an organization’s volunteers can complete tax returns for individuals not only in their local area, but from across their province or territory as well. Similarly, the introduction of virtual clinics also offers organizations the opportunity recruit volunteers from outside the local community.
As to the mechanics, some organizations have drop-off services where you can drop off your paperwork which will be delivered to a volunteer who will do the tax return electronically. In other cases, the return is done over the phone or via e-mail exchange so you don’t have to leave your home. “The volunteers are working hard to help people in their communities. So don’t be afraid to take advantage of them,” Daniels said.
In 2020, 673,380 tax returns were completed (includes in-person and COVID-19 virtual clinics) under the program, down from 835,200 returns in 2019, pre-pandemic. As of this week, 226,300 Canadians have taken advantage of the program.
To see if you’re eligible and to find a clinic, go to canada.ca/taxes-help.
Need extra help this weekend?
Finally, if you’re planning to work on your return this holiday long weekend, the CRA’s individual tax enquiries line will be open on Good Friday and Easter Monday from 9 a.m. to 5 p.m. local time, but will be closed on Saturday and Sunday.
Jamie Golombek, CPA, CA, CFP, CLU, TEP is the Managing Director, Tax & Estate Planning with CIBC Private Wealth Management in Toronto.