Determining when you need to pay your taxes is very important since the due date for your tax balance doesn’t always correspond to the filing deadline for your return. Confusing isn’t it? So, let’s clarify because it’s important to comply with the various deadlines in order to avoid costly penalties and interest.
Just about everyone needs to file this return and generally the deadline is April 30 (self-employed results in a different deadline, discussed below). April 30 is also the deadline for personal taxes owing which makes things straightforward.
If you, your spouse or common-law partner are self-employed your filing deadline is June 15th. However, your taxes are due on April 30th. In order to avoid interest charges, it’s a good idea to pay an estimate of your taxes owing by April 30 if you aren’t able to file your return by then.
The filing deadline for your corporate tax return is completely separate from your personal filing deadline. Typically, corporations have 6 months to file a T2 from their year-end date. However, if you owe corporate tax, it’s due earlier. For the majority of small corporations, the tax balance is due 3 months after year-end. It’s not always easy to get your financial information together by then and, if that’s the case, you may want to pay an estimate of your taxes owing to avoid late payment interest. If you overestimate the tax owing, the balance will be refunded when you file your return.
It’s important to note that, for larger corporations, taxes may be due 2 months after the year-end date.
If you’re registered for GST/HST, your deadline will depend on your filing frequency. For example, if you file monthly or quarterly, you generally have until the end of the following month. The due date is on the return so always check to ensure you get it in on time.
As you can tell, if you have a corporation that’s registered for GST/HST it can seem like there is always a tax filing and payment deadline. And, that would be quite accurate. Add in the need for installment payments (which weren’t covered here), and it can become a lot to manage. Ensure you set up reminders, include the tax payment deadlines in your cash flow projections and, if you’re close to the tax payment deadline but don’t know the exact amount owing, pay an estimate in order to avoid late payment interest charges.