It’s Tax Day in Canada

Today is “Tax Day” in Canada, sort of.  The income tax filing deadline in Canada is usually April 30th.  They get a couple weeks more than we get here in the United States. Self-employed taxpayers have until June 16th to file, although they must pay any tax due by April 30th or else they are hit with penalties and interest on their tax debt.

This year, however, Canadians have until May 5th to file their income taxes.  There was a 5-day service interruption earlier this month caused by the Heartbleed bug, so authorities have granted taxpayers a corresponding 5-day deadline extension.

The Canada Revenue Agency (CRA) strongly encourages taxpayers to file electronically, but there are still the 17% of paper-filing holdouts.  Similar to US rules, Canadians must have their tax returns postmarked by April 30th (or May 5th this year) in order for the return to be considered timely.  And just like in the United States, a Canadian tax return does not need to be mailed with any special insurance, tracking, or certification.  It doesn’t have to be shipped via any special priority method either.  A simple first class postage (or equivalent) will suffice.  But paper filing creates unique problems (at least anecdotally) in Canada where the state-run postal service is not considered to be very trustworthy.

Check out these complaints that were undoubtedly written by grumpy Canadians on the eve of their tax filing deadline who are beginning to formulate excuses for filing late:

Assuming Canada Post even picks up mail from the mail boxes. Even so, I think majority of the post simply ends up collecting dust somewhere or even into the shredders.                                     ~ CKHY

I received NO MAIL in the last 9 days. No junk mail, no bills I am waiting for. I never receive mail on a Monday or Friday. How can we trust Post Canada to send tax returns ?                     ~ Bob_The_Bear

Tax Day 2014

It’s April 15th — tax filing deadline day!  From where I sit, there are only a couple more hours left to file your federal income tax return.  Today I should be writing about (and you should be reading about) procrastination, how to file an extension, what to do if you owe taxes and can’t pay, or various IRS statistics like how many returns have been filed, how many refunds have been issued, how much the IRS has paid out in refunds, etc.  Before the age of electronic filing, we used to see the obligatory TV news story about which post offices were open late and which ones had the longest lines.  But gone are the days of such innocent tax day topics.  Today I’m mostly seeing warnings about those pervasive telephone tax scams.

For as long as I can remember, the IRS has warned taxpayers of phony IRS calls, but it seems like it used to be an annual warning that came out in the “Tax Tips” series.  And it always seemed more like a theoretical problem with some anecdotal evidence here and there.  Today, however, these phone scams have become commonplace.  It doesn’t seem to matter where you live either; I’ve seen reports of phone scams all across the country.  And I’ve handled my share of calls from local taxpayers who have been scared out of their minds by phony IRS calls.  In Sacramento, some victims are being told that they are going to be arrested for tax fraud.  These scam artists are apparently very convincing.  Sometimes people who don’t even owe (and know that they don’t owe) are tricked into believing that they are in trouble with the IRS.

The IRS is very clear about what type of contact they initiate with taxpayers, and if you become familiar with the standard IRS warnings, you’ll never be fooled by a tax scam.

Roads More Dangerous on Tax Day

Tax debt is a major source of stress for some people.  But who knew tax time could cause such distress and turmoil on our nation’s roadways?

A study published in the Journal of the American Medical Association shows that fatal motor vehicle accidents spike right around the middle of April each year.  The sharp increase in fatalities is believed to be associated with the stress of Tax Day.  The lead researcher, Donald Redelmeier, identified the following contributing factors:

  • stress
  • lack of sleep
  • alcohol use
  • less tolerance to other drivers

Wait, aren’t these the conditions we drive in every day?

The researchers studied data from the IRS and the National Highway Traffic Safety Administration between the years 1980 -2009.  Of the 30 tax days during that time span, there were a total of 226 fatal crashes.  In comparison, there were only 213 fatal crashes during the 60 control days.  Even though most people now file their taxes from their computer and don’t have to get in their car and drive down to the post office, fatalities have held steady over the years.

Filing an Extension: Step by Step

A wise taxpayer knows his limits.  With exactly one week remaining to file your income taxes, you should know by now if they’re going to be done on time.  If you can’t get all the figures together and you can’t do a decent job on your taxes right now, maybe you need to file an extension.  Here’s how:

  1. Visit the IRS Free File web page
  2. Under “Choose a Free File Option,” click on “Browse the list of Free File companies” (this will take you to a comprehensive list of non-IRS Free File companies)
  3. Choose one of the Free File companies and this will lead you away from the IRS website — click on “Leave IRS Site”
  4. Find the Free Extension link and follow the instructions; it should take no more than 5 minutes

The beauty of doing this electronically is you get an email confirmation, no stamp, no paper.  But you can still do it the old-fashioned way by filling out a paper Form 4868.

Remember, an extension will not provide you with unfettered tax relief.  It gives you an additional six months to file, but it does not give you additional time to pay.  Interest and failure to pay penalties still apply.  Good luck!

Don’t Delay Filing Taxes

My internet connection is just a bit slower today and I wonder if it is due to all the Cyber Monday traffic. I’m going to make today’s post short. I don’t want you to stop what you’re doing — our economy needs you to continue making your online purchases. But take just a moment to think about your taxes.

We are creeping up on the end of the year and it’s a good time to assess where you stand with your federal taxes. Do you anticipate owing taxes for 2011? Many people will owe, and as a result, some will delay filing their tax returns. Don’t delay. File your return on time even if you know you are going to owe and even if you know you can’t pay. There are always options available to you if you cannot pay, and it is not worth the headache to incur additional penalties and interest associated with failure to file.

Talk with the attorneys at Montgomery & Wetenkamp about your tax resolution options.