If you have not yet paid your taxes for this year, or a previous year, it’s getting to the point where it is likely going to be costing you a lot of extra money. Now, if you don’t owe the CRA anything, you have a bit of a grace period to file your taxes without being penalized. However, if you knowingly owe the CRA money and you are putting off filing your taxes, you will be penalized the longer you wait.
Whether you are penalized or not, by not filing your taxes on time you are setting yourself up for some unnecessary risks and drawbacks.
What Will I Have to Pay If I Haven’t Filed my Taxes Yet?
For those who owe the CRA money, there will be a 5% interest penalty on any balance owing, plus an additional 1% interest penalty on the balance owing for each additional full month that the return is late, up to a max of 12 months. However, it isn’t capped there. For people who haven’t paid their taxes for the previous three years, they may face even steeper penalties.
With that in mind, the CRA may waive penalties if your payment is late as a result of circumstances that were beyond your control. Some of the reasons would be illness, financial hardship, civil disturbances, or natural disasters. If one of these reasons has delayed you in filing your taxes, we suggest you look into form RC4288 Request for Taxpayer Relief.
For those who the CRA owes money to, you can breathe a small sigh of relief. If you don’t owe any money you have up to 5 years to file your taxes for that calendar year. However, keep in mind by not filing your taxes you will also not receive your tax refund. Also, if the CRA later discovers that you owe them money, they will slap on the previously listed interest penalty even though you may have been unaware that you owed them money.
My Taxes Are Very Complicated and I Don’t Know Where to Start!
We know how challenging filing your taxes can be. That’s why our team has made it our mission to help our clients manage their taxes in as stress-free an environment as possible. If you are currently late on filing your taxes and don’t know where to start, please reach out to our tax accountant team using our contact form and we will be glad to assist you.
If you have any questions about this article or financial relief during COVID-19, or you want to make an appointment with an accounting professional at Naicker & Associates, please contact us at (604) 469-9369. We are based in Port Moody, BC.