its never good to file taxes early

I was listening to Jason Staats on his podcast in February 2024 when he said, "It's never good to file your taxes early. It's almost always better to file when you have to."

He was speaking facts. Let me explain.

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You may feel anxious and want to get it over with, but how anxious would you feel if the CRA calls and says, “You rushed and filed too early. Now you owe penalties because you forgot to include some income.”

This isn’t just a hypothetical. This is a real case I’m working on right now to help a friend. He’s facing over $7,000 in penalties and interest because he forgot to declare income from an extra T4 slip that didn’t arrive before he filed. We’re now arguing with the minister to reverse the charges. Filing too early turned a simple oversight into a very costly mistake.

Why Filing Too Early Can Cost You

1. Incomplete Information
   When you rush to file early, there’s a high chance you’re missing key documents, like a T4, RRSP contribution slip, or other tax forms. Filing without all your paperwork can result in inaccurate returns or missed deductions, both of which could cost you.
2. Risk of Penalties
   Forgetting to declare even small amounts of income can lead to hefty fines and interest charges from the CRA. And trust me, reversing those penalties isn’t easy—my friend’s case is proof.
3. Amending Returns is a Hassle
   If you file early and realize later that you left something out, you’ll need to file an adjustment. While that’s possible, it’s time-consuming and doesn’t guarantee you’ll avoid penalties or interest if the CRA catches the error first.

When Should You File?

The sweet spot for filing is after you’ve received all your tax slips and verified all your information—but before the deadline. For most of my Canadian clients, that's the first week of April. Filing during this period reduces the risk of forgetting something (possible penalties), and gives you time to gather every document and total up all your income for the year, and gives us time to plan and claim every deduction or credit you’re entitled to.

Final Thoughts

While it might feel good to get your taxes out of the way early, it’s smarter to wait until you have everything in hand. Filing too early can lead to costly mistakes, stress, and even battles with the CRA. Take the time to double-check your paperwork, and file only when you’re ready.

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This is not legally binding tax advice. This is educational analysis. Say hello if you need help.

hello@taxesmadesimple.ca

WhatsApp - 613.600.4194