What are the benefits of filing your tax return as soon as possible?
With CRA expected to authorize online filings of 2020 tax returns on February 26, 2021, it means tax season is right around the corner. A lot of us are slow to file our tax returns, quoting ‘There’s still months before it needs to be filed’, however it can certainly pay to file your taxes as soon as possible. Here are some reasons why.
You will receive your refund quicker
Probably the most obvious reason to file your taxes earlier, is the thought of receiving your tax refund as soon as possible. Why wait to receive a refund when you can use those tax dollars however you see fit.
Dealing with unwanted surprises sooner, the dreaded ‘balance owing’
Unfortunately, a few of us will receive the dreaded news that we actually owe additional taxes to CRA, rather than being due a tax refund. Even as an employee with taxes being deducted through payroll, there will be some who will owe additional taxes to CRA, as their employer will have failed to deduct a sufficient amount of tax from their pay cheques. The additional taxes will need to be paid to CRA by April 30th (This could be pushed back due to COVID relief by the Government), it will be easier to budget for any tax amount owing if receiving the news earlier rather than later.
GST/HST credit calculations
For those who qualify to receive the quarterly GST/HST credit, you are required to file your taxes in a timely manner to ensure that the credit payment can be made to you on time. Delays in filing your taxes can result in delays in receiving your credit. We have seen cases where credit payments have been missed, and clients have been required to chase up to receive their missing payments.
Applications for CRB
For workers who are new to Canada, and have recently lost their work position due to COVID, having a tax return filed with CRA will help speed up the CRB application process. It means Services Canada will have access to all of your income information on their system, to allow them to authorize your approval to receive CRB payments as quickly as possible.
Mortgage / Loans / Credit applications
With 2021 being forecasted to break real estate sales records, there will be an increased number of individuals seeking mortgage approvals. Mortgage brokers will be keen to see your 2020 Notice of Assessment as proof of income, the Notice will only be issued to you by CRA if you have filed your 2020 tax return. Filing your taxes and having your 2020 Notice of Assessment will help speed up your mortgage approval process.
If you are looking to file your taxes as soon as possible, and require assistance, why not contact a professional.
The Jackstaxback team is always happy to help those who require assistance with filing their tax returns. We are able to prepare tax returns before the tax season if officially open, and have them ready for submission to CRA upon the February 26, 2021 opening date.