Should You File Your Taxes Early or Wait? Pros and Cons Explained
Every February, Canadian taxpayers face a decision: should I file my tax return as soon as I receive my tax slips, or should I wait closer to the April 30 deadline? While there’s no universal right answer, understanding the advantages and disadvantages of each approach helps you make the best decision for your situation.
At BBS Accounting in Toronto, we’re often asked about optimal filing timing. The answer depends on your specific circumstances, income sources, and whether you’re expecting a refund or owe taxes to the CRA.
The Case for Filing Early
Filing your tax return in February or early March offers several compelling benefits that make early filing attractive for many Ontario taxpayers.
Faster Refunds: If you’re expecting a refund from the CRA, filing early means receiving that money sooner. The CRA typically processes electronically filed returns with direct deposit within 8-14 days. File in late February, and you could have your refund by mid-March. Wait until April, and you won’t see that money until May.
For Ontario taxpayers counting on refunds to pay bills, make RRSP contributions for the following year, or cover property tax installments, those extra weeks or months matter significantly.
Identity Theft Protection: Tax-related identity theft has increased in Canada. Criminals file fraudulent returns using stolen Social Insurance Numbers, claiming refunds before the legitimate taxpayer files.
Once you file your return, it’s much harder for criminals to file a fraudulent return in your name. Filing early provides a protective barrier against this form of fraud.
If someone else files first using your information, you’ll face months of paperwork with the CRA proving your identity and claiming your legitimate refund. Early filing avoids this headache entirely.
Less Stress and More Attention: Filing early eliminates tax season stress. You’re done while others are just beginning to gather tax slips. If issues arise, like missing T-slips or questions about deductions, you have weeks or months rather than days to resolve them.
Early filers also get priority attention from tax professionals. At BBS Accounting, February and early March are less hectic than late March and April, meaning more time to review your return carefully, answer your questions, and provide strategic advice.
By late April, accountants are working long hours and managing dozens of deadline-driven files simultaneously. Early engagement provides better service.
Accurate Financial Planning: Once your return is filed and you know your exact tax liability or refund, you can plan the rest of your year with certainty. If you owe taxes, you have more time to arrange payment. If you’re getting a refund, you can make informed decisions about using that money.
For Ontario business owners, knowing your final 2025 tax picture helps with 2026 planning, including estimated quarterly installment payments if required.
Avoid Last-Minute Errors: Rushing to meet the deadline increases the likelihood of mistakes. Math errors, forgotten tax slips, incorrect direct deposit information, and missing signatures are far more common in returns filed days before April 30.
Filing early when you’re calm and focused reduces errors that can delay refunds or trigger CRA reviews and reassessments.
Beat the Accountant Rush: The best accountants book up quickly. If you need professional help from firms like BBS Accounting, contacting us in February increases your chances of getting appointments at convenient times rather than squeezing in wherever we have last-minute availability.
Early clients also benefit from unhurried consultations where we can discuss tax planning strategies for the current year, not just prepare last year’s return.
The Case for Waiting
Despite these advantages, sometimes waiting to file your return is the smarter strategy.
Missing or Corrected Tax Slips: Tax slips arrive throughout February and early March. T4s should arrive by the end of February, and T5s and other investment slips by late February. However, corrections and late slips happen.
If you file early based on preliminary slips and then receive a corrected slip or an additional slip you didn’t expect, you’ll need to file a T1-ADJ adjustment request. While not complicated, amendments take longer to process, delay refunds, and create extra paperwork.
Waiting until late March reduces the likelihood of receiving corrected slips that require adjustments.
Complex Tax Situations: If you own a business, have partnership income, rental properties, or other complex income sources, you might not receive all necessary documents until March or even later.
T5013 slips from partnerships often arrive late, sometimes not until mid-March or later if the partnership filed an extension. T3 slips from trusts can also be delayed.
Filing early when you lack complete information leads to inaccurate returns. Waiting ensures you have everything needed for an accurate filing.
Uncertain Deductions: If you’re still gathering receipts, calculating home office expenses, or reconstructing mileage logs, filing early might mean leaving money on the table. Taking time to organize your records properly can result in larger deductions and bigger refunds or lower tax bills.
This is particularly relevant for self-employed individuals who may have numerous scattered receipts and expenses to compile and categorize.
Strategic Tax Planning Opportunities: Sometimes there are legitimate reasons to delay filing even when you have all information. If you’re working with BBS Accounting to implement year-end strategies or reviewing whether to claim certain optional deductions like RRSP contribution carryforwards, waiting provides flexibility.
You might also want to wait to see final income numbers for all family members before optimizing who claims children’s expenses, medical expenses, or charitable donations.
Owing Taxes: If you owe taxes to the CRA, there’s little advantage to filing early unless you want peace of mind from completing the task. You can file as late as April 30 and pay by April 30, keeping your money as long as possible.
Some taxpayers prefer keeping their money as long as possible, whether for cash flow purposes, earning interest in high-interest savings accounts, or simply maintaining liquidity. If you owe $5,000, that money sitting in your account for an extra two months provides flexibility.
Just remember, if you owe taxes, you must both file and pay by April 30 to avoid penalties and interest.
Waiting for Life Events to Resolve: Life events like receiving a legal settlement, finalizing a divorce, or closing on a real estate transaction might affect your taxes. If these situations are pending and will be resolved soon, waiting ensures you report everything correctly the first time.
Special Situations That Affect Timing
Certain circumstances make the early versus late decision more clear-cut.
Self-Employed Individuals: If you’re self-employed, your filing deadline is June 15, though any balance owing must still be paid by April 30 to avoid interest charges. However, waiting until June isn’t usually beneficial.
Most self-employed individuals benefit from filing in March or early April. This provides time to gather all business expense documentation while still filing reasonably early. It also helps with planning 2026 quarterly tax installments if required.
At BBS Accounting, we recommend self-employed clients complete their bookkeeping by late February, allowing us to prepare returns in March with adequate time for review.
Expecting Large Refunds: If you had too much tax withheld and are expecting a large refund, filing early makes sense. There’s no reason to give the CRA an interest-free loan any longer than necessary.
Common scenarios include employees who had too much tax withheld, individuals who made large RRSP contributions, or those with significant medical expenses or charitable donations.
Investment Income: Brokerages and investment firms can be slow issuing T5 and T3 slips, particularly for complex accounts with international holdings. If you have substantial investment income, watch your mailbox and CRA My Account carefully.
The CRA doesn’t receive copies of all slips until late February or early March. Filing before receiving all investment slips almost guarantees needing to file an adjustment.
Rental Property Income: If you own rental properties in Toronto or elsewhere in Ontario, you’ll need time to compile all rental income and expenses. Property management fees, repairs, utilities, property taxes, and mortgage interest must all be documented.
Waiting until March gives you time to reconcile accounts, gather receipts, and calculate Capital Cost Allowance on rental properties accurately.
Partnership or Trust Income: T5013 slips from partnerships and T3 slips from trusts are frequently delayed. If you’re expecting these slips, don’t file until they arrive. The issuing partnership or trust has filing deadlines later than individual deadlines, causing delays.
RRSP Contribution Decisions: Since you can make RRSP contributions until March 2 for the prior tax year, many taxpayers wait to file until after this deadline. This allows you to see your income picture, calculate optimal RRSP contributions, make those contributions, and then file reflecting them.
A Balanced Approach for Most Ontario Taxpayers
For many taxpayers, a middle-ground strategy works best. Wait until late February or early March when most slips have arrived and been corrected, but don’t wait until April and face the last-minute rush.
Filing in early to mid-March captures most advantages of early filing while reducing the risk of missing or corrected slips.
Create a checklist of expected tax slips based on your income sources. Once everything arrives, review them for accuracy, compare them to last year’s slips to ensure nothing is missing, and then file promptly.
At BBS Accounting, March is our busiest month, representing the sweet spot for most clients. Tax slips have arrived, correction windows have passed, but sufficient time remains for thorough preparation and review.
Making Your Decision
Consider these questions to determine your best timing:
Do you have all your tax slips, or are you still expecting documents? If you’re still waiting, don’t file yet. Check CRA My Account regularly to see which slips have been reported.
Is your tax situation straightforward with only T4 employment income, or complex with business income, investments, and rental properties? Simple situations can file early; complex situations benefit from waiting until March.
Are you expecting a refund or do you owe taxes? Refunds favor early filing; owing taxes removes urgency except to beat the April 30 deadline.
Do you need professional help, or can you self-file? If you need professional help from BBS Accounting, early contact provides more scheduling options, though you might still wait to actually file until March once all documentation is complete.
Have you fully organized your deductions and records? Complete records support earlier filing; incomplete records suggest waiting.
Are there pending life events or financial transactions that will affect your taxes? If so, wait until they’re resolved.
Protection Regardless of When You File
Whenever you decide to file, take these protective measures:
File electronically through EFILE or NETFILE rather than by paper. Electronic filing is faster, more accurate, and provides confirmation of receipt from the CRA.
Use direct deposit for refunds by ensuring your banking information is current in CRA My Account. It’s faster and safer than waiting for cheques that can be lost or stolen.
Review your return carefully before submitting. Even if you use software or BBS Accounting prepares it, check for errors. Look for typos in banking information, missing slips, and unusual amounts.
Keep copies of your complete return and all supporting documents for at least six years. The CRA can request supporting documentation during this period.
Check your refund status using CRA My Account rather than calling. The online system provides faster, more accurate information about your return’s processing status.
Register for CRA email notifications to receive alerts when your return is assessed and when your refund is issued.
The Self-Employed Deadline Consideration
If you or your spouse are self-employed, your filing deadline is June 15, but any balance owing must still be paid by April 30 to avoid interest charges.
The June 15 deadline doesn’t provide a real advantage if you owe money. However, if you’re expecting a refund or break even, the extended deadline provides breathing room for proper documentation.
At BBS Accounting, we still encourage self-employed clients to file by late April or early May when possible. This allows time for any CRA questions or reassessments to be addressed during the slower summer months rather than during the next busy tax season.
The Risk of Extensions
Unlike the United States, Canada doesn’t have a formal extension process for individuals. June 15 is the deadline for self-employed individuals, but beyond that, there’s no extending your filing deadline.
If you miss the April 30 deadline (or June 15 if self-employed), the CRA charges late-filing penalties of 5% of your balance owing plus 1% per month for up to 12 months. If you’ve been charged late-filing penalties in the previous three years, the penalty doubles.
The late-filing penalty is separate from interest charges on unpaid balances, which compound daily at the CRA’s prescribed rate.
Working with BBS Accounting
Whether you file early or wait until closer to the deadline, BBS Accounting is here to help Toronto and GTA residents navigate tax season successfully.
We recommend contacting us in February to schedule your appointment, even if you won’t file until March. This ensures you get the time slot that works best for your schedule.
For new clients, we typically need two to three weeks to prepare returns properly, including reviewing prior years, understanding your situation, and identifying optimization opportunities. Plan accordingly based on your desired filing date.
The Bottom Line
There’s no single right answer for everyone. Your personal circumstances, tax situation complexity, and financial needs determine whether filing early or waiting is optimal for you.
Many Ontario taxpayers with straightforward returns and refunds coming benefit from filing in late February or early March. Those with complex situations, multiple income sources, or who owe taxes often find waiting until mid-to-late March provides the best balance of accuracy and peace of mind.
The worst strategy is waiting until April 29 or 30 and rushing to meet the deadline. That maximizes stress and errors while providing no benefits.
If you reach late April and aren’t ready to file (and you’re self-employed), take advantage of your June 15 deadline. If you’re not self-employed and aren’t ready by April 30, file anyway with the information you have and file an adjustment later if needed – it’s better than missing the deadline entirely.
Choose your timing strategically based on your unique circumstances, and you’ll navigate tax season successfully. Contact BBS Accounting today to discuss your situation and schedule your tax preparation appointment. We’re here to make tax season as stress-free and beneficial as possible for all our Ontario clients.