For most Canadians, filing their 2016 income taxes are now a thing of the past -- way to go, guys! Surprisingly, with only a few more days to go until the May 1st tax return deadline, many still haven't prioritized tax preparation this year according to a recent study commissioned by H&R Block which shows that two out of five Canadians still need to file their taxes. That's a bit concerning.
The good news is that when it comes to Canadians and their attitudes towards filing, the survey revealed that the majority still consider themselves to fall under the In-Betweener category (55%) - also known as those who file a couple of weeks before the deadline. They are followed by Procrastinators (23%), who file at the last second and the Eager Beavers (19%), who file well in advance of the deadline.
The study revealed that the overwhelming majority of Canadians (86%) plan on filing their taxes before the May 1st deadline, but there are more than a few other reasons why doing it sooner rather than later might be a good idea:
Avoid last-minute surprises - By delaying your tax return preparation and submission until the last minute, you run the risk of finding out about missing paperwork when it's already too late. Filing early means you'll have more time to track down any necessary documents and make sure you don't miss any credits and deductions you're eligible to.
Don't risk missing the deadline - Life can be hectic and stressful as it is, you don't have to add more to the mix if you submit it now rather than later. Missing the deadline could mean having to pay interest and penalties. In fact, if a filer owing taxes forgoes the May 1st deadline target date, they can expect to pay a 5% late penalty on the balance, plus 1% in interest compounded daily for every month they do not file, for a maximum of 12 months. Who needs penalties in their lives?
Get that refund earlier - On-time filers will benefit from receiving their refund earlier rather than later because that money can immediately be put towards personal savings or investments. The CRA says the average tax return for Canadians amounts to $1,645 so if you need a little encouragement to file before the deadline maybe a potential return could do just that. And think of all the possibilities: paying down debt, making travel plans for the summer, boosting your investments...
Hopefully you're now convinced of why you should file as soon as possible to avoid missing the deadline. As a reminder, self-employed individuals and their spouses or common-law partners have until June 15, 2017, to file their returns, but if they have a balance owing to the CRA, that's still due no later than May 1, 2017.
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