Death and Taxes

As the saying goes, there are only two certainties in life: death and taxes. If the former happens,  loved ones still have to deal with the latter, even though the person is gone. Since we’re well into tax season, and the May 1, 2017, deadline is fast approaching, we thought we would give you some quick tips on preparing taxes for a deceased person.

Lucky for us, the Canadian Revenue Agency (CRA) has a lot of information on its website.

The Final Return

The final tax return is to be filed for the year the individual passed away (starting January 1 to the date of the death). For income earned after the death, a T3 Trust Income Tax and Information Return form must be filled out. If you are unsure of what to include in this form, speak to an accountant or tax specialist for assistance. The CRA has information online, as well.

When do you have to file?

The general rule, set out by the CRA, is as follows:

For deaths that occur between January 1 and October 31, the final return needs to be filed by April 30 of the following year.

If the death occurs between November 1 and December 31, it needs to be filed within six months after the date of death.

There are lots of little exceptions and differences for specific situations, which our outlined on the CRA website. Again, these can be discussed with a professional tax expert if you are unsure.

What if the Deceased Owes Tax?

It’s important for the person or people in charge of the deceased’s finances to file the final return on time, regardless of their ability to pay. Even if you cannot pay the full amount in a lump sum, you can avoid penalties by filing by the due dates.

In certain cases, CRA will not penalize you if you can prove you were late in filing due to circumstances beyond your control. To apply for this, you will need to fill out the appropriate forms to prove your case.

Contact Chapel Ridge Funeral Home and Cremation Centre

At Chapel Ridge in Markham, we are here for you during your difficult time. We understand the dealing with the financial burden, and the seemingly endless paperwork can be emotionally draining. Our Funeral Directors and staff can offer advice, and refer you to professionals who can help ease this burden. Call us today at 905-305-8508!