Late-filing tax penalties for individuals, self-employed and corporations
If you or your corporation owe tax and do not file your return on time, CRA will charge a late-filing tax penalties. The tax penalties are 5% of your balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months, or the total of 17% tax penalties.
If CRA charged a late-filing tax penalties for any of your preceding three years, your current late-filing penalties will be 10% of your current year balance owing, plus 2% of your current year balance owing for each full month that your return is late, to a maximum of 20 months or the total tax penalties of 50%.
Repeated failure to report income penalty
If you fail to report an amount on your personal or business return in any year and you also failed to report an amount on your return for any of the preceding three years, you may have to pay a federal and provincial/territorial repeated failure to report income penalty.
The federal and provincial/territorial tax penalties are each 10% (or combined 20%) of the amount that you failed to report for repeat failure of reporting income.
False statements or omissions penalty
You may have to pay a penalty if CRA believes that you, knowingly or under circumstances amounting to gross negligence, have made a false statement or omission.
The tax penalties are 50% of the understatement of tax and/or the overstatement of credits related to the false statement or omission.
Late Filing Tax Penalties: Consequences of Not Filing Past-Due Returns
If you fail to file a tax return, the CRA has the ability to paralyze you financially by charge you big tax penalties and interests. CRA often use aggressive legal actions to collect the tax debts. Those legal actions Include bank freeze, income garnishment, etc.
Over the last several years, the CRA has improved its database of income transactions and increased its ability to identify people who have not filed taxes. If you have unfiled returns, you rise to the top of the list of people the CRA wants to target to collect revenue.
But if you wait for the CRA to find you, the cost of additional tax penalties grows exponentially. And if the CRA seeks you out before you have filed past-due returns, the likelihood of punishment escalates.
What Should You Do to Reduce Tax Penalties
The worst thing you can do is to ignore or to avoid the tax problems. Act now to control and repair the damage before your life is ruined. Contact Tax 911 Now at 1-877-918-2991 for a confidential free consultation today!
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