April 30 approaches! Have you filed your taxes yet? The topic’s on everyone’s mind, so here are some tax stories and tips in the news.
New tax scam surfaces
It’s not just tax season, it appears to be scam season as well.
Two weeks ago, the Canada Revenue Agency issued a warning about a phishing scam promising refunds via text message and now, Ontario police are sounding the alarm about a fresh tax fraud.
Scammers are reportedly contacting victims by phone or mail posing as the CRA and promising refunds or demanding immediate payment of back taxes. They ask for personal information in order to make those fictional payments, police say.
Of course, the real CRA also contacts people by mail, so it might be hard to pick out a scam. However, police urge Canadians to contact the agency first and verify if the request is real before providing any personal info.
U.S. expatriates pay hefty price
The U.S. has the dubious distinction of being the only country in the world that continues to impose taxes on citizens living abroad. So approximately one million Americans living in Canada have the pleasure of being double-taxed, even if they haven’t lived in the U.S. in decades.
Unfortunately, the only (legal) option to avoid being twice-taxed is to renounce U.S. citizenship, which is a costly proposition in itself.
Expatriates lose their right to vote, lose access to U.S. consular help, and face the slight possibility of being turned away at the border. But there’s also a monetary cost.
The Oath of Renunciation comes with a $2,350 price tag and then there’s an exit tax, a costly and complicated levy. The Financial Post features a primer on U.S. exit taxes and what they could cost you. And it’ll probably leave you feeling like this:
Tardy taxpayers lose out
Canadians are apparently pretty reluctant tax filers. A recent survey indicates some 20 per cent file just before the deadline and the CRA says only 11 million returns had been filed as of April 6.
Whether it’s procrastination, disorganization or just passive-aggressive taxpaying, late filing can cost you.
Paying late can lead to fines and audits, but even last-minute filing could carry a hefty price tag. According to The Globe and Mail, many slow taxpayers miss out on thousands of dollars in credits.
For example, surveys show that few Canadians plan to claim the Canada Employment Amount — a credit for work-related expenses — even though most are eligible.
The deadline is just over two weeks away, so you’d better get cracking. Don’t miss out on available credits and benefits and definitely don’t be late.