Every time the new year rolls around, you may already be getting that nagging feeling that tax season is upon us. Before you know it, April will be here, and you may find yourself scrambling to collect all the documents you need to file your return on time.
If you wait until the last minute to file, you’ll not only be putting an excessive amount of stress on yourself, but you could risk making mistakes. Filing your return on time should certainly be a goal, but you could make tax season a little less stressful by filing early.
Key Points
- Filing your taxes early offers several perks, including less stress, more time to collect documents, more time to pay, and potentially faster refunds.
- If you miss the deadline to file, you could face penalties.
How Early Can You File Taxes?
You can file your taxes as early as Tuesday, February 18, 2025. The deadline for tax filing is on Wednesday, April 30, 2025.
Learn more: When Can I File My 2024 Taxes In Canada?
Why Should You File Your Income Taxes Early?
There are several reasons why you may not want to wait for the deadline to file your taxes this year:
Reason 1: Get Your Tax Refund Early
If you’re expecting a tax refund, then you can get that money quickly by filing early. The earlier you get the refund, the more time you’ll have to put it to use. For example, if you plan on putting it in a savings account, the more time it sits in the savings account the more interest it’ll earn.
Moreover, you can use that money to pay off your debts. You may want to tackle the debt with the highest interest rate first, which can help you save money in interest payments. Otherwise, you may decide to pay down your smallest debt first to gain some momentum.
Learn more: How To Pay Off Debt Faster
Reason 2: More Time To Pay Taxes Owing
If you’re expecting to owe taxes, then filing early will give you significantly more time to pay them. In Canada, income tax returns must be filed by April 30th. Any owed income taxes must also be paid by this date. Starting May 01, any taxes owed will start to incur interest and other late payment penalties. As such, if you were to file your return early, you would have more time to earn the money you owe, or figure out where the money is going to come from.
If you know you’re going to owe a significant amount of money, then giving yourself as much time as possible to prepare may be wise.
Reason 3: Time To Gather Any Missing Paperwork
Depending on how complex your tax return is, you’ll likely need to have a variety of documents ready, such as brokerage RRSP slips or expense receipts, to help you file accurately. Gathering these documents can take time, especially if you have to chase others to get what you need. By filing your taxes early, you’ll know which papers you need ahead of the deadline. If you’re missing any, you’ll have more time to collect this information without having to scramble at the last minute.
Reason 4: Get The Appropriate Help
If filing your income taxes is a little more complicated and you need to seek the help of a professional, getting a head start will guarantee that you get the help you require. The start of a new year is the busiest time for accountants and other qualified tax professionals, so if you don’t get in early enough, you may not have to wait as long to get an appointment.
Reason 5: Give Yourself A Grace Period
Rushing to file your return right before the deadline could lead to mistakes which can cause issues and result in penalties. If you’re worried about making an error or simply want to err on the side of caution, filing early will allow you to provide yourself with a “grace period”. In other words, you’ll have some time to amend your return if you find an error after you’ve filed. Similalrly, by starting early, you can take more days to review your tax form and ensure nothing is missing.
How To File Your Income Taxes In Canada Early
There are a handful of ways to file your taxes:
- Online: You can file your income taxes electronically using tax software to file. This is the quickest and most convenient method.
- Paper Return: If you prefer the manual route, you can fill out and mail a paper tax return.
- Volunteer Tax Clinics: If you earn an income under a specific threshold and have a simple tax situation, you can visit a free tax clinic where volunteers will assist you in filing your return.
- Authorized Representative: You can have a tax specialist file your taxes for you.
What Documents Do You Need To File Your Taxes?
You’ll need certain documents to complete your income tax return, such as the following:
Personal Information
You’ll need to provide several types of personal information, including:
- Your Social Insurance Number (SIN)
- Date of birth for you, your spouse, and any dependents
- Your Notice of Assessment (NOA)
Income Slips
The types of forms you need to verify your income depend on the type of income you earn. Here are some common examples:
| Employment | T4 |
| Self-Employment | T2125 T5013 |
| Government Benefits | T4E T5007 |
| Retirement | T4A T4A(P) T4A(OAS) T4RSP |
| Investments | T5 T3 T5008 T5013 RL slips (Quebec-specific) |
Expense Receipts
If you’re eligible for tax credits or deductions, you’ll need to provide supporting documents. These may include receipts and bank records that prove your expenses.
Learn more: T4 vs. T4A: What’s The Difference?
What Happens After You File Your Taxes Early?
After you’ve filed your income taxes, the following will take place:
- CRA Processes Your Return: The CRA will review your tax return, which can take anywhere from 2 to 8 weeks, depending on how you filed (ie. online versus mail).
- Notice of Assessment (NOA): After the CRA reviews your return, they’ll send you an NOA. This document summarizes your tax return and confirms whether you are eligible for a refund or have taxes owing.
- Receive A Refund Or Make A Payment: If you’re owed a tax refund, you’ll receive the funds either via cheque or direct deposit. If you owe taxes, you’ll need to pay by the payment due date.
- Additional Information: Sometimes, the CRA may request additional information to verify the information contained in your tax return.
Bottom Line
Filing your tax return early may be a good idea, especially if you want to make sure you don’t miss the deadline or scramble to collect tax documents at the last minute. If you are cutting it close to the deadline, perhaps filing electronically can help expedite the process.
