What Does My Payday Loan Mean For My Personal Taxes?

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Do payday loans affect your taxes in Canada? If you’ve taken out a payday loan, you might wonder if it’s taxable income, if the interest is deductible, or if it impacts your tax return. Here’s what Canadian borrowers need to know about payday loans and personal taxes.

Are Payday Loans Taxable in Canada?

 A  payday loan is similar to a personal loan, in that you pay interest on the amount owing. Whether you borrow from a payday loan service such as Speedy Cash or banking institution, you don’t own that money – it remains the property of the lender. Since you are not earning income on the interest, you do not have to claim it on your personal taxes. So, to answer the question, “What does my payday loan mean for my personal taxes?” the answer is simply, nothing! 

Can You Use a Payday Loan to Pay Taxes?

 While payday loans have a neutral effect on your personal tax return, you can – however – use a payday loan to pay any outstanding personal taxes you may owe. This way you can avoid interest being charged by the Canada Revenue Agency on amounts owing. A payday loan is a stress-free solution to getting back into the government’s good graces. 

 Don’t forget that taxes are due April 30. If personal taxes are filed late, there is a penalty of 5% on your 2019 balance owing, plus an additional 1% of your balance owing for each full month your return is late, to a maximum of 12 months. Of course – it’s best to get your personal tax return submitted on time so you can keep your hard-earned money where it best belongs – in your pocket! 

Do You Need to File Taxes to Get a Payday Loan?

 Some income sources, for example, Child Tax, CPP and OAS, require that you file your tax return each year in order to continue receiving the benefits.  Speedy Cash is unable to loan on these income streams if they have been discontinued, which can have a negative effect on cash flow.  But we are here to help! 

Need Help With Tax Season Expenses?

Tax season can bring unexpected costs, whether you owe money to the CRA or need to cover expenses while waiting for your refund. If you need emergency financial support, Speedy Cash offers payday loans across Canada to help bridge the gap.

Our payday loans are available online 24/7 or at store locations in Alberta, British Columbia, Saskatchewan, and Nova Scotia. You can borrow between $100 and $1,500 based on your income, and approved customers may receive funds through e-transfer or in-store pickup.

Remember: Payday loans don’t affect your taxes, but staying on top of your tax obligations can help you avoid CRA penalties and interest charges. If you need help managing tax-related expenses, apply online today or visit one of our locations.