If you are late filing your taxes in Canada there is no need to worry that you are the only one. Many people miss the deadline and it is for a variety of reasons. Sometimes there is the belief that nothing is owed and so do not have to put in a return. Some people will know that they will need to pay tax, but think that if they don’t put in a form they will seemingly disappear from the records and get away without paying – this will certainly not happen. Late tax filing can also happen if you know you need to pay but are not able to find the money.
While late tax filing means you have to pay a penalty it is also serious and is classified as a crime, meaning that there will be time and effort put into sorting the case out and presenting you with the bill. If you have not been able to access receipts and records, you still need to get in touch with the authorities and come to an arrangement. Late tax filing could mean that you are rushed when you least need to be so the ideal solution is to use the services of a qualified tax consultant who has plenty of experience when it comes to tax returns and late tax filing.
The longer you ignore the situation and don’t put in your return, the longer you are breaking the law. End the late tax filing problems by submitting your tax returns as soon as you can. Owing tax is not illegal, so it is best to file and then let your representative arrange a payment plan – or even better – a reduction in what is owed by way of the removal of interest and penalties.
If you do not put in the return on time, it is going to be estimated and the figure that the CRA come up with may be a lot higher than it should be. You will then be left trying to figure out the correct figure and all because you have late tax filing issues and have not submitted the correct details to the CRA. If you do not manage to get your representative to slow down the process and negotiate the affordable tax payment plan for you, there may be legal sanctions put in place and it will be difficult for you to carry on your day to day life.
Regardless of how far behind you are with late tax filing the problem will not go away. It may just be a year but could be as far back as ten years and the tax debt is still there. The late tax filing penalties are 5% of what is owed for first time offender, and over time this can add up to a substantial figure. Added to this will be another fee of 1% for each month that the payment is late and this will last for 12 months and compounded daily interest. If you have been late tax filing in the past three year, the penalty is going to be higher.