# Snowbirds and tax returns



## Davis (Nov 11, 2014)

I'm planning to retire in 2016 and travel extensively (but remain a resident of Canada). How do you meet the April 30 deadline for filing a tax return? Do you plan to be home by then? Or do you overpay instalments to avoid late filing penalties?


----------



## Daniel A. (Mar 20, 2011)

Late filing is late filing no matter what the penalty applies.

E filing is easy and can be done from anywhere.


----------



## avrex (Nov 14, 2010)

I don't understand. Is there some reason why you can't do this electronically while you're abroad?


----------



## Davis (Nov 11, 2014)

I don't think netfiling from abroad is a problem. I'm thinking it will be difficult to get my hands on all of the T3s, T5s, etc., that I need to do the returns. As I understand it, the penalty is 5% plus 1/2% per month of the amount outstanding. If you owe nothing, the penalty is therefore zero.


----------



## Daniel A. (Mar 20, 2011)

You are correct I'm wrong.


----------



## Eclectic12 (Oct 20, 2010)

Davis said:


> ... I'm thinking it will be difficult to get my hands on all of the T3s, T5s, etc., that I need to do the returns...


This may not be a problem ... I signed up with my broker for paperless services so I retrieve all the T3s, T5s, Annual Trading summary etc. as PDFs from the broker web site. I haven't tested logging into the broker web site from another country.

If I were to travel similarly ... there would only be a couple of bank accounts to ball park the interest paid.


Something for you to investigate is whether you can setup your accounts so that enough of the required forms are available electronically.


If this works out, as long as you have a computer - there's tax return software that can be downloaded (commercial or free) that will NetFile.


Cheers


----------



## fraser (May 15, 2010)

I would do one of the following. First of I would do some tax planning in early November (we are doing that now) to determine what your estimated tax position will be. Then do a pro forma return, you could use 2013 or 2014 program, to estimate your tax position-refund or pay.

If you think that you will have to pay, simply remit some money to cover that plus add some room for any potential errors. When you get back, after April 30, file your return. As long as you are in a refund position you will not have a penalty.

The other way is to simply file a return remotely. Guestimate some numbers. When you get home and have the final numbers refile an amended return. 

My choice would be option 1.


----------



## james4beach (Nov 15, 2012)

The critical factor is whether you will have a payment owing. If you have taxes payable, you can't file late. If you have a credit coming then you can file as late as you want... there is no penalty.

A couple years ago, I quit my job and went traveling overseas during tax time. Before tax time, I ran a rough calculation in tax software and determined that I had a refund owing with a healthy enough margin that I was confident it was certain. I didn't file my taxes until August. There was no late penalty and I got my refund after I filed.


----------



## Davis (Nov 11, 2014)

Thank you for your answers. This is really helpful. I think I will do some extra planning before I leave and figure out whether it is easier to file from overseas or remit extra and file a pro forma return. Both are good options.


----------



## Davis (Nov 11, 2014)

Or remit extra and file late. That works too.


----------



## Eclectic12 (Oct 20, 2010)

james4beach said:


> The critical factor is whether you will have a payment owing. If you have taxes payable, you can't file late.
> 
> If you have a credit coming then you can file as late as you want... there is no penalty...


This is true ... up until the point where CRA formally requests a return.
Then it's best to negotiate something with CRA. 

I know a guy years ago who did similar but when he was back was more interested in other things than to complete the return.
He also ignored serveral CRA letters requesting a return ... until CRA gave up then used the info they had to do the return.
Not surprisingly ... CRA's limited info had him owing money, to which they tacked on penalties and interest.

After he got over the shock of how big this all added up to, he promptly adjusted the return and was able to get the penalties waived.


Filing in August is probably okay but I'm not sure how late and how many letters CRA will send these days before moving to the "we did your return for you" phase.


Cheers


*PS*

If it was me ... I'd want to NetFile remotely to ensure CRA knows nothing is owed, if at all possible.


----------



## PuckiTwo (Oct 26, 2011)

Davis said:


> ...... I think I will do some extra planning before I leave and figure out whether it is easier to file from overseas or remit extra and file a pro forma return. Both are good options.


*If it is easier to file from overseas depends how complicated your portfolio and your accounts are* - we would not want to deal with all the computer- and paperwork during our vacation/travel time. I think it could be quite a horror unless your vacation home is equipped with a fully functioning office (starting with 1 or 2 laptops, smart phone(s), calculator, fully equipped desk, printer, enough space to spread your documents. You will be surprised how much stuff you need to be functional business-wise. You would not want to need the smart phone for calculation while your spouse has a hour-long chat with a friend on the one phone. 
Consider also that you may not have the IT access in other countries you need to operate your machines. Even if they say they have WiFi it can be very spotty! And don't forget the cost you may have to pay overseas if you are online for a long time.

We prepare our returns as much as we can before we leave, fire it off to the accountant, corporate taxes can wait until late spring/early summer. Our accountant is awesome - he calculates the return on what we gave him, we give him a cheque, he files in time, CRA has its money. There is always information from the brokers which comes in last minute. So we refile that after we come back - it usually isn't a lot. But this process means you have to do your homework before you leave.


----------



## Eclectic12 (Oct 20, 2010)

PuckiTwo said:


> ... I think it could be quite a horror unless your vacation home is equipped with a fully functioning office (starting with 1 or 2 laptops, smart phone(s), calculator, fully equipped desk, printer, enough space to spread your documents. You will be surprised how much stuff you need to be functional business-wise.


Isn't a full office overkill?

The OP is retired, with no mention of a business or an accountant. There is also a suggestion that the returns are DIY ... so I'd expect it would be run of the mill stuff where if it's 98% available as a PDF, where one is used to working with computer files/tax software - there won't be huge requirements.

Granted ... we don't know how complicated the OP's situation is or preferred work tools so it is an important consideration, where YMMV.

I've done my taxes for about four years needing a connection to the internet, the PDF T forms, a spreadsheet, tax software and one laptop.
Being retired would add more sources of income ... but I'm not seeing the need for a full office.




PuckiTwo said:


> .... Consider also that you may not have the IT access in other countries you need to operate your machines. Even if they say they have WiFi it can be very spotty! And don't forget the cost you may have to pay overseas if you are online for a long time.


This I would be more worried about than the full office ...


Cheers


----------



## kcowan (Jul 1, 2010)

We came to Mexico in 2008 after buying a condo in 2007. DW went home April 2nd and emailed me scans of all the docs so I could efile April 30th. I was managing the remodelling project.

Since then I have converted nearly everything to electronic. Plus we get our mail forwarded. We are back by the time the assessment arrives (May 15th).

The only things that are not online are the Corporate Action Notices. We have advised TDDI to call our VOIP line because the delays in mail forwarding often miss the response window.


----------



## Davis (Nov 11, 2014)

More useful responses. Thanks to each of you. I should have provided more details. For the 2016 tax year, our last year of work, we would have employment-related amounts (T4s, transit pass tax credits, RRSP contributions), investment-related amounts (T3s, T5s), and charitable donations, so that will be difficult to do using a rental place's wi-fi or (shudder) an internet cafe. (We won't have a fixed address.) For subsequent years, we'd be down to T3s, T5s and charitable donations, so it should be much simpler, and remote filing should be easier. (Pension payments won't start until age 60 or 65.) I'll have to make sure that new broker electronifies us. Charitable donations we can track ourselves. No corporate, self-employment or rental property issues, fortunately. Thanks again.


----------



## fraser (May 15, 2010)

You will have absolutely no problems from CRA if you file a few months late. Your only issue will be penalty and interest for late filing and these can be easily avoided. Just set up a bank transfer (assuming you estimate that you will owe money) for April 25th and you will be good to go.


----------



## Eclectic12 (Oct 20, 2010)

Davis said:


> More useful responses. Thanks to each of you.


You are welcome.

Interesting the you list employment amounts as an issue as it's been over ten years since my employer switched to PDFs that the employee retrieves for both pay stubs as well as T4s.


As for quality of wifi ... YMMV. 
El Salvador has almost no land lines. I found the wifi outside the capital hit or miss but in the international section of the capital it was more plentiful as well as superior to most Canadian as well as US cities work has sent me to on training.


Having the broker setup electronic access may not be difficult. In my case, I ticked a box online and within a week I had everything available, including historical monthly statements, pre-dating my request by six years. The part that didn't go back into the past was the tax documents (T forms).


Cheers


----------



## PuckiTwo (Oct 26, 2011)

Eclectic12 said:


> Isn't a full office overkill?


Depends how you define it. I personally would already call "2 laptops, 2 smart phones, surfsticks, several charge cables, writing material, and a place where you can lay down all that stuff to work", *too much of an office* when on vacation.:biggrin::biggrin:


----------

