The deadline to file personal income tax returns with the Canada Revenue Agency (CRA) is April 30, 2024, which means the best time to organize your tax slips is now.
The deadline also applies to self-employed individuals with a June 15 filing deadline because taxes owed are still due on April 30. Getting your taxes done early helps you avoid stress and painful penalties.
When to expect your tax slips?
You should receive most of your slips and receipts by the end of February, although trust and partnership slips usually come in by the end of March.
Here's an overview of the filing deadlines for common tax slips:
- Reporting entities must send T4 employment income slips, T4A pension income slips, and T5 slips for investment income by Feb. 29, 2024.
- Trusts have a deadline of 90 days after the trust's year-end to report income to beneficiaries on T3 slips. As such, those with a 2023 calendar-year reporting period have until March 31.
- Partnerships must generally report partnership income to their partners on T5013 slips by March 31.
What to do with your tax slips?
The differing deadlines mean that you can still be receiving tax slips in April, and you may be inclined to set them aside until you receive all of your expected documents and are ready to sit down with your tax return preparer.
Reject that inclination and take a more organized and itemized approach.
A written checklist or a personal tax organizer can keep track of the slips and receipts you expect to receive and can help you identify documents that may be missing. Assembling your slips and documentation will make verifying accuracy and catching any omissions easier.
What are the penalties for not reporting income?
Tax slips help you confirm that all sources of income are reported each year. They help ensure that you pay the appropriate amount of tax and avoid interest on underpaid tax. They also enable you to avoid the penalty for failing to report income.
For example, if you omit an income amount of $500 or more on your 2023 tax return, and in any of the 2020, 2021, or 2022 tax returns, you may face a penalty for failure to report income.
The federal and provincial or territorial penalties are each equal to the lesser of the:
- 10% of the amount you failed to report on your return for 2023; and
- 50% of the difference between the understated tax (and/or overstated credits) related to the amount you failed to report and the amount of tax withheld related to the amount you failed to report.
Revenu Québec separately assesses Quebec tax penalties.
How to deal with missing tax slips?
Information slips are sometimes received late, or not at all. If this occurs, there is an increased risk of unreported income and associated penalties.
Here are three tips to help you avoid penalties, even if you are dealing with missing slips or receipts:
- Before filing, contact the issuer for any missing information slips or income receipts and request a duplicate. If you are a registered user of the My Account service offered by the CRA, you may be able to view your tax slips online and save yourself some time.
- If you are unable to locate the necessary information in time to file by the deadline, estimate the missing income amounts to the best of your ability. Supporting documents, such as pay stubs or account statements, may help you do this. Always retain your supporting information in case the CRA requests to see it. If necessary, you can request an adjustment to your tax return once the actual slips or receipts are received, and the amount of income is confirmed.
- Be sure to file on time to avoid late-filing penalties, even if you have yet to receive all your expected tax information slips or receipts for the 2023 reporting year. The CRA will not automatically waive penalties for late or inaccurate filing because of missing slips.
What about receipts for tax deductions?
While you could incur a penalty for missing an income slip and under-reporting your income, it is also important to keep track of slips that support income tax deductions or credits, in particular charitable donation receipts and medical expense receipts.
Although tax slips for income are reported to the CRA and can be accessed using CRA’s My Account, the same is not true for charitable donation receipts or medical expense receipts. If you donate to several charities, it can be difficult to make sure that you have all the receipts to support your claim for donations, as they could be sent throughout the year when donations are received, or at the end of the year.
Setting up an electronic or paper folder at the start of each year can help to keep the receipts all in one place so that they are easy to find when you are getting ready for your tax preparer. The same idea works well for medical receipts. Whilst these receipts do not have to be submitted to the CRA with your tax return, the CRA could ask for copies if they are conducting a post-assessment review of your return.
Don't let a third party's oversight add to your tax bill. Taking the time to manage and collect your information slips and tax receipts before filing your income tax return can help you avoid paying unnecessary taxes, interest, and penalties.
Contact your BDO advisor for answers to other questions about your tax reporting.
The information in this publication is current as of January 22, 2024.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.