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Tip of the Week
The June 30th deadline is looming. Many Canadian incorporated businesses have December year-ends. A corporation has 6 months to file their return after year-end. However, filing your return by June 30th is not the entire story.
A corporation is supposed to pay monthly instalments for income tax. Three months after year-end the corporation is supposed to calculate if they have any tax owing for the year, after considering the instalments already paid, and send it in by March 31st. So the June 30th filing deadline is just that, the filing deadline, not the paying deadline.
Of course you should file your return on time, because you don’t want to pay any penalties for filing late. But, remember that the filing penalties are based on an amount of income tax owing. If you have paid all of your taxes, there is no penalty if you are late. I don’t recommend late filing, because you never know for sure that your taxes are calculated properly.
My point today is that there is interest to be paid to CRA if you owe tax and you wait until you file your tax return to pay it. So don’t think about June 30th as if it was the only deadline that matters.