The 2022 tax filing season starts in February. The filing deadline is May 2nd, as April 30th falls on a Saturday. The deadline is June 15th for self-employed individuals or anyone with a spouse/partner who is self-employed.
Filing your taxes on time
It’s not just about your tax refund. Filing late can result in penalties that can delay or alter government benefits you may be entitled to, such as the Canada Child Benefit and GST/HST Credit.
As mentioned, the deadline for a self-employed individual to file is June 15th, but if any taxes are due, the amount is still due on April 30th. Interest will accrue from April 30th for any amounts outstanding, but there is no late filing penalty until after June 15th.
What Are The Penalties For a Late Filing?
If you send in your return after the deadline, there are no penalties if you are expecting a refund or the tax owed is zero.
If you do owe tax, the penalties are as follows:
Penalty
The CRA levies a blanket penalty of 5% of your balance plus 1% of your balance owing every month for up to 12 months.
Interest
The government also charges interest on both the amount of tax you owe and the imposed penalties.
There are instances where the CRA waives penalties and or interest if you can show that conditions beyond your control precluded you from meeting the deadline. Reasons such as financial hardships, natural disasters, serious illness or accident, plus others, may be considered.
Do I need to file a return?
Even if you don’t owe anything, you must file a return under Canadian Tax Law.
If you don’t file a return:
- The CRA won’t send you a refund if you don’t tell them they owe it to you
- Benefits you are eligible for, such as those mentioned above, cannot be determined
- Your future Canada Pension Plan retirement benefit won’t be updated
There are other scenarios where filing is required, even if you don’t owe anything, but it’s just simpler if you file a return for what it’s worth.
Personal Tax Changes for 2022
In previous years you only needed to focus on gathering your tax slips, but for 2021 it may look somewhat different due to the times we are in. You must report the income if you received financial benefits due to COVID. If you received monies from the Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB), and Canada Recovery Caregiving Benefit (CRCB), you would get a T4A slip from CRA. The tax was withheld at the source for these benefits, but you may still owe taxes or receive a refund, depending on how much you earn from other sources.
For 2022, the following changes apply:
- The RRSP annual contribution limit increased to $29,210 from $27,830 in 2021.
- The federal basic personal amount is up to $14,398 if your income is $155,625 or less. A clawback applies to higher taxable incomes and is $12,719 if you earn $221,708 or more.
- The annual TFSA limit for 2022 is unchanged at $6,000.
The federal tax rates and brackets are:
- Up to $50,197: 15%
- $50,197.01 to $100,392: 20.50%
- $100,392.01 to $155,625: 26%
- $155,625.01 to $221,708: 29%
- $221,708+: 33%
The provincial tax rates (over and above the federal amount) can be viewed in our QuickTools Resource.
While filing your income tax return can be easy, it can also be relatively complicated. Contact our office if you are unsure of what your situation is. A brief conversation can clarify what your personal requirements are.