It is probably because there needs to be sufficient time to provide individual taxpayers with the information they need to prepare their own income tax returns. Interest earnings have to be calculated, dividends have to be computed, stock sales have to be reported, etc. Speaking for the US (since I don’t have any knowledge of […]
Written on Friday, July 18th, 2008 by ferminhampton :: 0 comments to this post
It is probably because there needs to be sufficient time to provide individual taxpayers with the information they need to prepare their own income tax returns. Interest earnings have to be calculated, dividends have to be computed, stock sales have to be reported, etc.
Speaking for the US (since I don’t have any knowledge of how Canada’s taxation works), there is also the fact that most pass-through entities like trusts, partnerships and S-corporations are generally required to operate on a calendar year. There needs to be enough time after December 31 for them to finish their year-end reconciliations, prepare the entity tax return, and then provide the necessary information to the partners, shareholders, or beneficiaries.
Certainly, at SOME point they had to just say “How about such-and-such for a deadline?” But the basic idea was probably that 3-4 months should be enough time for all the required information to be delivered to individual taxpayers so they can prepare their own tax returns.
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