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Late-arriving T3s can create havoc at tax time

While preparing my taxes I realized that I'm missing slips for the exchange-traded funds and real estate investment trusts that I own. As a result, I can't file my taxes and get my refund. Shouldn't I have received these slips by now?

It's a common irritant at tax time: You diligently collect all your information slips and receipts, sit down at your computer and fire up your tax software – only to realize you're still missing key pieces of information.

The problem is that there are different mailing deadlines for different types of slips. T5 slips, which report dividends and interest income, had to be sent out by the end of February, so you likely have these by now.

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But T3 slips, which report income paid by mutual funds, exchange-traded funds, income trusts, REITs and limited partnerships, don't have to be mailed out until the end of March. Some companies don't wait that long; I've already received at least one T3, but I'm still waiting on others.

This is a source of frustration and confusion for investors. Last year, I dutifully filed my taxes and received my refund, only to be hit with a reassessment (thankfully it was small) from Canada Revenue Agency after a T3 slip arrived that I had forgotten about. This year, I won't be in such a hurry to file.

The delay in receiving T3 slips also increases stress for accountants, who have to delay filing clients' returns until all the information is received.

"They're an accountant's nightmare," Brian Quinlan, partner at Campbell Lawless Professional Corporation chartered accounts in Toronto, said of T3s.

"Right now we're sitting on probably 20 returns. They've got their T4s and their T5s and their RRSP receipts. But we know more are coming."

When T3s arrive in early April, accountants often have to scramble to meet the April 30 tax filing deadline. The problem is even worse for clients who have investments held in a trust, because trusts have to file their own returns by the end of March – even if all the paperwork isn't available.

"So for any trusts we do that hold mutual funds or income trusts we often have to amend [the tax return]a couple of weeks later, which is frustrating," he said.

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Dylan Reece, a financial adviser with Nicola Wealth Management in Vancouver, said the financial industry "could do a better job of getting tax information to clients in a more timely fashion."

If it's not possible for product manufacturers to issue T3 slips any earlier, then the Canada Revenue Agency should consider extending the April 30 tax filing deadline to give people more time to prepare their returns, he said.

"We're trapped, as the middleman, between the product manufacturers and the clients who need the information," he said.

If you're waiting for a T3 slip, there's no reason you can't start doing your tax return now. That way, when your slip finally arrives, you can quickly plug in the missing numbers and send your return off to the CRA.

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About the Author
Investment Reporter and Columnist

John Heinzl has been writing about business and investing since 1990. A native of Hamilton, he earned a master's degree from the University of Western Ontario's Graduate School of Journalism and completed the Canadian Securities Course with honours. More

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