Tax bytes: deadline day, evasion convictions drop, and TFSA confusion

A pocket watch counts down the hours to tax deadline. Stock photo by Getty Images

A drop in tax-evasion convictions and general befuddlement over TFSAs are in the news today, the absolute last day you have to file your 2014 tax return.

Deadline day

We’d hope you already know this, but just in case: the filing deadline for your 2014 tax returns is midnight tonight.

The Canada Revenue Agency extended that deadline last week after publishing a statement that wrongly identified May 5 as the last day instead of the traditional April 30.

That deadline is rarely extended and usually in case of extraordinary circumstances. That said, this does mark the second consecutive year that Canadians have had a grace period; the CRA also pegged last year’s deadline at May 5 after an online security breach shut down its netfile servers for several days.

In 2008, other website problems bumped the deadline back to May 6.

Tax-evaders take heart

So we’ve already encouraged you to file on time. So we’re not encouraging you to do anything illegal. But those are who are inclined to file late, not file at all, or otherwise cheat on taxes may catch a break.

A recent report by The Tyee shows that tax-evasion convictions have dropped by half since 2009.

Between 2009-2010, more than 200 people were convicted of tax evasion, involving a collective $26 million.

See: Tax audit FAQ

The most recent available figures — March 2013-2014 — saw just 98 people convicted, although for a total $27 million in dodged payments.

The report suggests that Canadians aren’t becoming any more honest, just that a resource-strapped CRA is having more trouble catching them. The agency axed 400 auditors and investigators in 2012 and now have fewer people to scrutinize returns.

TFSA contribution room up, comprehension down

Tax-free savings accounts are hugely popular with Canadians. Imagine what a sensation they might be if Canadians actually understood them.

A recent survey by Tangerine Financial Services (formerly ING Direct) found that 51 per cent of Canadians have a TFSA, but also they’re very much in the dark about new developments with those accounts or even just how they actually work.

To wit:

  • Barely half — 56 per cent — were aware of the much-ballyhooed new contribution limit of $10,000 trumpeted in the recent federal budget.
  • 31 per cent didn’t know what they can carry unused contribution room over to the next year (similar to an RRSP)
  • More than one quarter — 28 per cent — aren’t really sure how these accounts work. But are still putting money into them.

Don’t get cocky though. Today’s the deadline, so make sure you’ve got your taxes in. The penalties can be ugly.

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