Why you should file your income tax return

Essentially, taxes are used to fund social programs, health and education systems, transportation and roads and even interest on government debt. But governments have other, more specific reasons for collecting taxes, which include:

• Raising money fairly by ensuring each taxpayer contributes according to their income.
• Distributing wealth by taxing people with higher incomes to support those who are less well off.
• Stimulating sectors of the economy that are vital for the future of society (technology, aerospace, etc.).

Constraints and principles of a tax policy

Normally, a tax policy should adhere to certain principles and constraints. For example:

1. Necessity: Taxation is legitimate only if it is essential to finance public needs.
2. Equity: Tax contributions must be allocated fairly based on each person’s income and financial means.
3. Stability and predictability: The stability of a country's tax policy is one factor that attracts foreign investment.
4. Simplicity and clarity: Governments should ensure taxpayers can understand their obligations (although the tax system has become much more complex over time).

Deadlines for filing your income tax return

In Canada, individuals must complete and file their income tax returns with the government by April 30, except for:

• People who are self-employed: the deadline is June 15.
• Deceased persons: special rules apply.

What information do you need to file your income tax return?

Every situation is different, but here are the main documents you will need, depending on your circumstances:

• Employment income slips (T4, Relevé 1, etc.)
• Receipts for RRSP, FHSA, and VRSP contributions
• Slips for RRSP and RRIF withdrawals (T4RSP, T4RIF)
• Investment income slips (T5, Relevé 3, T3, Relevé 16, etc.)
• List of medical expenses
• Charitable donation receipts
• Receipts for political contributions and union dues
• Federal and provincial notices of assessment from the previous year
• Employment insurance benefit slips (T4E)
• Pension and annuity income slips (T4A, Relevé 2)
• Slips for interest paid on eligible student loans
• Proof of tax-deductible expenses
• Child care receipts
• QPIP benefit slips (Quebec only)

What happens if you don’t file your income tax return on time?

Filing a tax return by the deadline is mandatory for anyone who earned taxable income during the year.

• If you file late, governments will charge late-filing penalties.
• If you don’t file at all, governments will require you to file your return within 30 days.
• If you owe taxes, you’ll also be charged interest on the balance you owe.
• In some cases, you could lose or delay credits or benefits (e.g., Canada Child Benefit, GST/HST credit).
• Failure to file could lead to enforced collection (such as wage garnishment) or legal penalties.

Also, if you have instalment payments to make and fail to pay them on time, you’ll be charged interest on those amounts. The interest will begin to accumulate starting on the instalment due date.