Coast Capital Savings talks tax bills and refunds
Surrey, BC – As the April 30th tax filing is quickly approaching, Coast Capital Savings, Canada’s largest credit union by membership and one of Canada’s most significant corporate community investors, has tips for those who are anticipating a tax bill and those who are looking forward to a refund.
There is no doubt that whether you owe or are due to receive a refund, tax time is stressful. Now that the wayward receipts have been found, the last question from your accountant has been answered and you have hit submit on the CRA website, it is time to consider how you’re going to settle your bill –or, if you’re lucky – how to best put your refund to work.
If you owe
If you owe the government after filing your 2018 taxes, it is best to have paid in full before the April 30 deadline or you will find your debt growing with each passing month. The Canadian Revenue Agency applies interest and a 5 per cent late penalty fee starting May 1 – and another 1 per cent for each additional month the account is owing.
For those facing a tax bill, Coast Capital Savings’ Vice President, Retail Operating Office, Rachel Coyle, points to a good rule of thumb. “First and foremost, don’t avoid paying your bill. It’s natural to want to bury your head in the sand. However, that approach only compounds the problem by adding further debt, additional late fees and uncomfortable conversations with the Canadian Revenue Agency (CRA).”
Coyle offers three tips to Canadians who find themselves owing on their 2018 taxes:
- The first and most obvious is to ensure you have paid your tax bill, or as much of the balance possible, prior to the April 30 deadline
- If you did not meet that deadline, don’t avoid the CRA, instead, work with the agency to set up a payment plan.
- Talk to your financial advisor and develop a plan for next year.
If you receive a fund
At the other end of the spectrum, the first instinct for those who are expecting a tax refund is often a shopping spree or a family trip to a favourite hot spot. Coyle says that just as those who owe, those who are anticipating a refund should apply some rigor in determining the best plan for those funds.
“While individuals may calculate a certain refund total, it’s prudent to hold off on any spending until the refund total is confirmed following filing,” says Coyle. “Until the CRA has reviewed your file, it is simply a projection. Hold off on making any large purchases or allocating these funds until they land in your account.”
In addition, Coyle offers these tips to ensuring you make the most of your refund.
- Remember it is a REFUND– not found money. You haven’t won the lottery, this is your money so use it wisely.
- Create a plan that allows for modest splurge but also advances your financial goals.
- Work with a financial advisor to determine how your refund is best utilized. Consider if you are best served building on your emergency fund, paying debts or building on your investments.
Regardless of your tax return status, there is no time like the present to start planning for next year’s deadline to put yourself in better position for the next tax filing deadline. Consider putting a little money aside each month into an account (high interest savings accounts or a tax free savings account are both good options) or a Registered Retirement Savings Plan contribution that will help set you up for the future and provide a level of tax relief.
A financial advisor can also help review options and determine what may be the best approach based on your specific circumstances. Book an appointment now to take full advantage of next 12 months. We all know it’ll be tax season again before we know it.
About Coast Capital Savings
Coast Capital Savings is Canada’s largest credit union by membership and B.C.’s first credit union to become a federal credit union. Owned by its 572,000 members, Coast Capital offers banking and investment services digitally and through its 52 branches in the Metro Vancouver, Fraser Valley, Okanagan, and Vancouver Island regions of British Columbia. An Imagine Canada Caring Company and a Certified B Corporation in recognition of its social performance, Coast Capital invests 10 per cent of its bottom line in youth focused community organizations, programs, partnerships and events. The credit union has been recognized as one of Canada's Most Admired Corporate Cultures™, and holds a Best Managed Companies Platinum Club designation. Coast Capital has a history of introducing innovative products to help their members achieve financial wellbeing including Canada’s first free chequing account from a full-service financial institution and Help Extras®, enabling members to invest in their future. To learn more, visit coastcapitalsavings.com.