The Bookkeeper's Notes on tax compliance and tax filing deadlines by tax type ...
everything in one place ... for work from home bookkeepers and small business owners doing their own books.
Tax Compliance Responsibilities
Due Dates For DEC, 2013 & 2013/14 Tax Season
Tax Filing Deadlines
Income Tax, Canadian Sales Tax, Payroll Tax
Interest Rates, GST/HST/PST, BC WCB, Auto Allowance, Mileage, CCA
GST/HST Quick Method
Current Quick Rates
Historical Quick Rates
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I developed this tax filing deadlines page as a handy reference for myself. While I do my best to ensure it is accurate and complete, I make it available for your use with the understanding that I cannot be held liable for errors and/or omissions. Please make yourself familiar with my site policies prior to relying on any of the information on this site.
What you will find in this chat ...
LET'S CHAT ABOUT ...
Income Tax Filing Dates
Canadian Sales Tax
Click here for December, 2013 tax filing deadline dates.
Your GST/HST return is paper filed on form GST34-2 E Personalized Return. The bottom portion of the form includes a line for remitting your payment. Do NOT use forms RC158 GST/HST NETFILE/TELEFILE Remittance Voucher ... or RC177 GST/HST Balance Due Remittance Voucher ... to remit your normal reporting payment. For normal reporting, use RC159 Amount Owing Remittance Voucher or use MY PAYMENT to pay online.
Once you are registered for GST, Revenue Canada mails the form ahead of your deadline. This enables you to meet your tax filing deadline.
Online filing is now available ... making meeting yourtax filing deadlines easier than ever. You should step outside of your comfort zone and try it if you are still filing a paper return. It's quick and easy to use. There are two ways to file online:
Since July 1, 2010, if CRA does not send you your paper form, it may be because you are now required to file online. If this is the case, CRA will continue to send you a remittance form with your access code on form GST34-3 E Electronic Filing Information Sheet.
The groups that must file online are registrants with annual taxable supplies of $1.5 million plus, BC or Ontario registrants with RITC requirements, and builders affected by BC and Ontario HST transitional rules.
If you fail to file in the correct format or file inaccurately, penalties will apply ... beginning after tax filing deadlines ending on or after October 1, 2010.
Not filing electronically will result in a $100 penalty. All subsequent failures result in a $250 penalty for each occurrence.
Filing inaccurately ... not reporting RITCs, grandparented housing rebates, new residential rental property rebates, grandparented housing sales subject to HST, new housing rebates assigned to builders, transitional new housing rebates and tax adjustments ... may be subject to:
When filing online (through GST/HST NETFILE or My Business Account) and a balance is owing, you have three ways to pay it:
The biggest mistake new business owners make is to use funds collected in trust to finance their business or personal lifestyle. It creates a vortex many small businesses never climb out of.
It's important to remember GST/HST funds (and payroll source deductions) are collected on behalf of the government. They are held informally in trust by your business until remitted.
Money collected in trust is payable when due. Generally you cannot negotiate repayment terms with CRA for money held in trust like you can with income taxpayable.
To reduce the temptation to spend trust funds for your own personal expenses ... or to cover your business expenses, open up a savings account. At regular intervals, transfer your GST/HST collected into this savings account.
When you file your GST/HST quarterly (or annual) reports, pay (or transfer) any amounts owing from this account.
Taking this one action will ensure that you don't have huge tax amounts owing to the CRA which grow due to penalty and interest charges.
CRA can and will collect unremitted trust funds by any means allowed under federal legislation such as seizure and sale of assets, garnishments, and assessment of directors.
Reference Source: CRA> Newsroom> Alert> 2010> Tax alert - Abuse of source deductions and GST/HST amounts held in trust
How is my tax filing deadline determined?
Your tax filing deadline / due date for GST/HST is determined by your reporting period. Reporting periods are determined by your annual sales ... not whether you are a corporation or a sole proprietor.
|Annual Sales||Assigned Reporting Period||Optional Reporting Period||GST Filing Deadline||GST Payment Deadline||GST Installments Due (See Tip)|
|L.T. 1.5 million||Annual NOT Dec 31 yrend||Monthly or Quarterly||3 months after year-end||3 months after year-end||One month after each of your fiscal QUARTERS|
|L.T. 1.5 million||Annual Dec 31 year-end||Monthly or Quarterly||June 15||April 30||April 30,
|1.5 to 6 million||Quarterly||Monthly||One month after end of reporting period||Same as filing deadline||Not applicable|
|G.T. 6 million||Monthly||No options||One month after end of reporting period||Same as filing deadline||Not applicable|
Each assigned reporting period has an optional reporting period that you may opt for. If you are an annual filer, you should consider opting to file quarterly so you can claim your offsetting ITCs faster. Why?
When your net sales tax in a year is $3,000 or more, an annual filer must make equal quarterly installments (reporting them on line 110 of your GST return) in the next year ... without claiming the offsetting ITCs.
Small business owners often intermingle the GST funds collected with their own (instead of holding them in a separate account). Then they end up using the GST funds collected in trust to meet their cash flow requirements ... and get themselves in hot water when the GST funds collected are not available to remit to CRA come filing time.
By opting for a more frequent reporting period, you are less likely to think of the money as your own ... and less tempted to spend the funds held in reserve for the government ... with the added bonus of claiming your ITCs four times a year instead of once a year. That's why my preference is to reduce your risk by filing quarterly.
I've seen some business owners get into financial trouble by failing to meet their tax filing deadlines ... and falling behind on their GST/HST remittances because ... they spent the GST/HST funds. There was no intentional duplicity on their part. It's just that they were positive they had enough input tax credits (ITCs) to offset the payment owing.
If December 31 is your year-end date ... and you are an annual filer, consider this tip.
To meet the tax filing deadlines requirement and avoid interest charges, pay your GST/HST owing by the Balance Due Date of April 30th, even if you are filing by the June 15th deadline ...
Don't know if you are going to owe a payment or get a refund?
Your bookkeeper should be able to provide a fairly accurate ESTIMATE if your books are up-to-date. (You are getting your books done at least quarterly aren't you? If not, why not?)
If you want to switch from annual filing to quarterly filing (so you can recover your ITCs throughout the year instead of just once a year), it must be done before the end February. Complete Form GST20 Election for GST/HST Reporting Period ... or it can be done over the phone with a CRA representative.
Read more about GST/HST tax compliance here.
Between July 1, 2010 and March 31, 2013, only Saskatchewan, Manitoba, Quebec and Prince Edward Island charge PST. As of April 1, 2013, B.C., Saskatchewan and Manitoba are the remaining provinces that have not moved to HST, opting to retain PST.
BC and Ontario stopped charging PST when HST began on July 1, 2010. The transitional rules went into effect May 1, 2010.
The final PST return in BC and Ontario was due July 23, 2010. Supplemental returns should have been filed no later than January 23, 2011.
HST filing due dates and deadlines are the same as GST filing due dates. Your HST is filed on the same report as your GST.
On January 1, 2013 Quebec moves to their version of HST with P.E.I transitioning to HST on April 1, 2013.
B.C. however, held a referendum on the HST in July 2011. HST was voted out so PST returned to B.C. on April 1, 2013. You need to know there is now more than one BC PST rate.
To see an up-to-date summary of sales tax by province and territory, click here.
Click here for December, 2013 tax filing deadline dates.
Prior to July 1, 2010, your BC PST tax filing deadlines and due dates were determined as follows. BC reverted back to this structure effective April 1, 2013 ... EXCEPT the due dates now tie to the GST/HST due dates.
You can find more information on B.C.'s transition back to PST by clicking on the PST News button on the site navigation bar.
If you are new to PST, let me walk you through the PST Basics to get you up and running.
|Annual Taxes Remitted||Assigned Reporting Period||Optional Reporting Period*||OLD PST Filing Deadline||NEW PST Filing Deadline||PST Payment Deadline|
|L.T. $3,000||Monthly||Quarterly, Semi-Annually, Annually||23rd day following reporting period||One month after end of reporting period - same as GST/HST||Same as filing deadline|
|$3,001 to $6,000||Monthly||Quarterly, Semi-Annually||23rd day following reporting period||One month after end of reporting period - same as GST/HST||Same as filing deadline|
|$6,001 to $12,000||Monthly||Quarterly||23rd day following reporting period||One month after end of reporting period - same as GST/HST||Same as filing deadline|
|G.T. $12,000||Monthly||No Options||23rd day following reporting period||One month after end of reporting period - same as GST/HST||Same as filing deadline|
|Seasonal Businesses||Customized by Ministry||--||23rd day following reporting period||One month after end of reporting period - same as GST/HST||Same as filing deadline|
New = after March 31, 2013; Old = before July 1, 2010
*Optional reporting periods were at the discretion of the Ministry. Amount of tax remitted, nature of business, and tax compliance history were considered.
LET'S CHAT ABOUT ...
Click here for December, 2013 tax filing deadline dates.
Click here for current payroll tax rates like EI and CPP.
Source deductions are reported on a quarterly, monthly, semi-monthly or weekly basis on form PD7A. Your reporting period is assigned by CRA based on your remitter type (discussed below). Revenue Canada mails the form ahead of your due date enabling you to meet your tax filing deadlines.
You have two options for filing online:
For small businesses, monthly filers are the most common reporting period with quarterly filers being the other common period.
When an employee is paid (not earned) determines the payroll remittance due date.
Don't confuse this with GAAP guidelines for the matching principle where you record wages when they are earned (worked) not paid.
CRA determines your remitter type by calculating your average monthly withholding amount (AMWA). They add up all source deductions sent over the past two years divided by the numbers of payment periods over one year.
|AMWA||Assigned Reporting Period||Form PD7A Filing Deadline||Payment Deadline|
|L.T. $3,000*||Quarterly||15th of April, July, October, January||Same as filing deadline|
|L.T. $15,000||Monthly||15th day of following month||Same as filing deadline|
|$15,000 to $50,000||Semi-Monthly||25th day of same month and 10th day of following month||Same as filing deadline|
|G.T. $50,000||Weekly||Due 3rd work day after the period**||Same as filing deadline|
*Must have perfect payroll tax compliance history over a twelve month period to qualify. If not, you must remit monthly. If you qualify, CRA will notify you.
**Remittances must be done through a Canadian financial institution one full day prior to the due date to avoid penalty charges.
Ceridian has a number of payroll checklists that you should consider adapting for your own use to ensure you meet all your tax filing deadline obligations as an employer. They have lists for:
Their website also has an excellent small business payroll year-end guide in their resource section. While the lists are for Ceridian clients, you should be able to modify them for your purposes.
Sometimes, they move the pages around on their website. If by some chance the above link is not working, go to www.ceridian.ca and locate their resources and tools section. Hunt around in that area for "checklists and tips" and you will find it.
LET'S CHAT ABOUT ...
CPP (Canada Pension Plan) is one of the tax compliance items that must be deducted from an employee's pay cheque.
CPP is in effect across all provinces and territories however Quebec has its own program QPP. Everyone between the ages of 18 and 70 who are employed must contribute to the plan with 50% of the contributions paid by the employer. It is a mandatory employment deduction. Self-employed business owners pay both the employer and employee portion.
So do you ever wonder how you will receive your CPP benefits?
While CPP is a contributory plan based on your employment earnings, the CPP system is not a self funding plan.
It used to be that your contributions did not go towards funding your own pension ... they went to funding today's pensioners. That meant today's workers funded today's retirees.
However, the CPP system is now funded on a steady state basis. Current contribution rates are designed to create a constant fund over 75 years ... which means the Canada Pension Plan is actuarially sound for the next 75 years
Read more: http://www.cbc.ca/money/story/2010/03/24/flaherty-pensions.html#ixzz11mZtbjXP
There are three types of CPP benefits - disability, survivor, and retirement. I'm going to chat about the retirement benefits.
The pension is designed to replace about 25% of your average earnings over the years. It does not start automatically. You must apply to receive to begin receiving your retirement benefits.
I was reading Advice Hotline, a free e-publication by MPL Communications Inc. They had a short write-up this month (July 2009) on how our current CPP system works ...
... I thought I'd share the simplified overview with you because I find I do better work when I understand the background to a subject ... especially tax compliance items.
To receive a full pension from the CPP you have to have paid into it for 40 years. The earliest you can begin contributing is age 18. This means it is possible that you would be eligible for a full pension at age 58.
If you retire before you reach the full 40 years, your pension is prorated based on the number of years you paid in ... so if you contributed for 37 years, your pension would be prorated to 37/40 = 92.5% of the full benefits.
There is a catch though ... isn't there always. To be eligible for a pension, you have to have contributed for a minimum of 20 years. (The Pension Puzzle - see below - says that you qualify for a pension if you've made just one contribution ... but your pension would be very small.)
The CPP system is setup to assume you retire at the age of 65. If you elect to retire earlier (between 60 and 64), your pension is reduced 1/2 of 1% per month. So if you chose to retire at age 60, your pension benefits would be reduced by 30% permanently.
The reverse is also true. If you wait until 70 to receive your pension benefits, your benefits would be increased by 30% for the remainder of your life.
If you are interested in reading more about how pensions work in Canada, Bruce Cohen and Brian Fitzgerald's book entitled "The Pension Puzzle, Your Complete Guide to Government Benefits, RRSPs and Employer Plans" is an excellent read. It was last published in 2007 so although some of the information has changed, it is still a valuable guide.
If nothing else, the book explains and assures you that the changes made to the CPP system in 1998 ensures you will have CPP benefits when you retire ... this perhaps takes away a bit of the sting of meeting the tax filing deadlines a small business owner faces.
You get information about your CPP benefits from HRSDC. Two links that might be of interest ... You can estimate your CPP retirement benefits with the HRSDC Retirement Income Calculator ... and you can request a copy of your CPP Statement of Contributions.
You do not have to have a My Service Canada account to access the above information. If you have a My Service Canada account, you can view your CPP benefit information directly online.
I hope this bit of background on CPP makes it easier for you to understand and meet your payroll tax filing deadlines.
One of the most common questions by employees in January and February each year is, "When do T4s come out?".
--- 2014 T4 Due Date -- T4 Deadline 2014 ---
Friday, February 28, 2014
Employers need to have released T4 slips to employees on or before the due date (see box above for date). Failure to do so results in hefty fines.
You may be wondering whether you can give the employee an electronic copy of the T4 instead of mailing the paper slip. CRA says yes "if you have received the employee's consent in writing or electronic format".
PLEASE READ THIS BEFORE YOU PREPARE YOUR T4 SLIPS
It is important to remember that for the purpose of tax filing deadlines, income is reported in the year it was paid not when the income was earned.
This applies to your payroll source deduction remittances as well as the preparation of the T4 slips.
Do not confuse this with GAAP / ASPE reporting where you accrue unpaid but earned wage income in the year the wage was earned.
If you are using an accounting software program like QuickBooks, it knows the rules and will correctly prepare the T4s provided you have entered your payroll correctly.
The easiest way to meet your tax filing deadline is to file your T4 Summary and slips online. Prior to the end of each calendar year (about the end of November), CRA sends you a letter with your online access code. WATCH for this letter and don't throw it out.
Effective January 2011, you can submit up to 6 T4 slips using the T4 Web forms online by going to the CRA website and selecting T4/T5 and other returns>Filing a T4 information return> T4 Web forms.
If you still want to file by paper (available only if you have less than 50 slips), go to the Businesses tab on the CRA website and select Payroll>Completing and filing information returns. Under each section, you will find fillable forms.
Click here for more 2013/2014 Canadian Tax Season tax filing deadline dates.
Click here for information on Canadian payroll deductions and payroll tax rates.
Improved Electronic Filing Option at CRA
Meeting tax filing deadlines just got easier with electronic filing access for small business owners. CRA now has the ability to accept electronic returns for under 50 slips. It is fast and easy to use. They have a videocast to watch if it is your first time using this service.1-6 slips uses their free software T4 Web forms.
1-70 slips uses their free software T4 Desktop application
If you are still paper filing, move out of your comfort zone and try e-filing to meet your February 2011 T4 tax filing deadlines. You'll find it here:
Requirements for meeting tax filing deadlines - Mandatory E-filing for anyone who submits more than 50 slips.
T4 & T4A TAX FILING DEADLINES
FOR SPECIAL SITUATIONS
Death of Owner
The payroll information return(s) must be filed within 90 days of the death if the owner of the business dies. (Don't forget that you will have to close all CRA accounts after all final returns have been processed and paid.)
The payroll information return(s) must be filed within 30 days from the date thebusiness ceases to operate. (Note: Payroll source deductions must be remitted within 7 days from the date the business ceases.)50 plus slips
Payroll return must be filed electronically in XML. Paper filing in not an option. (Prior to January 1, 2010, only those with 500 plus slips had to file electronically.)
T4 Late Filing --- Failure to File T4
:-( Penalty Charges :-(
This strategy definitely takes money out of your pocket and does not help you achieve your goal of putting more money in your pocket.
If you can't meet your payroll tax filing deadlines, you absolutely need to consider hiring a bookkeeper to do your payroll.
Not being tax compliant is expensive!
Click here for December, 2013 tax filing deadline dates.
|Reporting Period||Annual Premium||Tax Filing Deadline||Payment Deadline||Annual Report Deadline|
|Quarterly||$1,500 plus||April 20,
|Same as filing deadline||February 28 (or 29) for prior year|
|Annual||less than $1,500||March 5th for prior year||Same as filing deadline||March 5th for prior year|
You will receive Form 1820 - Employer's Remittance Form each quarter if you are a quarterly filer.
Towards the end of each year, WCB will send out a letter informing you of your base rate and classification unit for the coming year. This is not a bill so do not make a payment.
Each year, quarterly filers will also receive an Employer Payroll and Contract Labour Report (form 1810). The purpose of the annual report is to reconcile your account for the previous year. It is due February 28 (or 29) each year.
WCB form 1810 non-filing tax compliance penalties
WCB Payment Options
If your WCB tax compliance rates include a surcharge, you need to do something to reduce it back to the industry average. Learn how The Employers' Advisors can help you.
Click here for more 2013/2014 Tax Year self-employed tax filing deadline dates.
|Ownership Type||Return Type||Installments Due
(see note 2)
|Filing Deadline||Balance Due Deadline
(see note 1)
|Sole Proprietor||T1 (T2125)||15th of March, June, Sep, Dec||June 15th each year||April 30th each year||same due
your business returns
Note 1 Here's a tip 1 - To avoid interest charges, pay your taxes owing by the Balance Due Date of April 30th, even if you are filing later.
Don't know how much tax is owing - your bookkeeper will be happy to ESTIMATE the amount for you to pay.
Note 2 Your required installments are determined each year when you file your return. There are several options. You may not be required to make any installments. Talk to your bookkeeper or tax preparer.
Find more information in The Bookkeeper's Notes on CCPC.
(see note 4)
|Return Type||Installments Due
(see note 5)
(see note 3)
|Balance Due Deadline|
(see note 4)
|CCPC with passive/investment income||T2||last day of month||6 months after year-end||balance due 2 months
|CCPC active business income only||T2||last day of month||6 months after year-end||balance due 3 months
Note 3 Watch out - A return must be filed even if taxes owing are ZERO OR your company is inactive.
Note 4 Small Canadian-controlled private corporations (CCPC) must meet conditions for 3 months due date. If the CCPC earns investment income, payment deadline is 2 months after year-end.
Note 5 There are three installment options to choose from. Choose the one that lets you pay the least amount in installments. CCPC may be eligible for quarterly installments if criteria are met ... one of which is a perfect compliance history.
Click here for a chat about Corporate Minute Book Requirements.
LET'S CHAT ABOUT ...
Owner / Manager Remuneration
The Toronto tax firm Rotfleisch & Samulovitch's website TaxPage.com has a tax tip entitled Directors' Liability for Taxes.
The conditions under which a director is personally liable for unpaid compliance taxes are examined. It is important to meet your tax filing deadlines to avoid liability. The article explains that:
You may want to read about CRA's policy on funds held in trust.
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