It is important to file your back taxes and look into past years income taxes. The principal reason for filing your back taxes is to be compliant with the law because failure in filing taxes is a federal offense which is punishable by huge penalty and a possible criminal prosecution and imprisonment. If you are in good standing with the law, it will help you to get a peace of mind and also to establish good history with tax compliance.
Anyone who has an income source is required by the law and the Income Tax Act to file the taxes every year. If you have not been able to file in the previous years or skipped your returns and you owe money on past years income taxes to the CRA, it is better to get up to date as early as possible. The CRA can levy heavy fines and penalties on people who do not file their taxes. This cost tends to get higher the longer you keep deferring the filing of your tax returns for the past years.
You can file past years income taxes by gathering the necessary documents and information and forwarding your tax forms to the CRA. You have to be particular about which tax years have not been filed by you. If you are not sure, you can get in touch with the CRA directly and have an inquire with them. You can then make a list of all the tax years for which you have retained copies of the tax return filings along with the payment copies, receipts and refunds. It will help you narrow down the list of years you still have to file for.
You have to gather old statements and other tax documents in order to file past years income taxes. You have to act as early as possible as it is not a good idea to get arbitrarily assessed and receive a Notice of Assessment while you are contemplating to process all your back taxes. You have to get the proper tax forms for the relevant year when you are filing income taxes past years.
Before you start the process of filing past years income taxes, it is always helpful to get professional help as you have to prepare the tax documents for the prior years. Accurate information has to be filled about your income and deductions by using relevant tax instructions which were current for the particular year you are filing. You have to seek professional help which will help you with the instruction books and make the process easy for you. The tax professional will also be able to guide you in terms of the scope of your filing project. You can seek pointers and advice.
By hiring a tax professional to prepare filing of your past years income taxes, you may be able to reduce the tax amount you are needed to pay and you will also be able to facilitate an equitable resolution with the CRA.