What happens if you missed the 2017 tax deadline? The Canada Revenue Agency (CRA) puts hefty penalties on those that file their taxes late. That is why Chartered Accountants always recommend filing and getting started on your taxes as early as you can. However, if you do file late, what exactly happens?
2017 Tax Deadlines
Mark it on your calendar, April 30th. That is the deadline that income tax returns have to be filed by. Any balance owed to the CRA also has to be paid by that date too. Any payment sent in the mail needs to be postmarked on or before that date also. For self-employed individuals, there is a bit more room. You have until June 15th to file your taxes. There’s a catch, though. Any balance owed still has to be paid at the normal time, April 30th.
Penalties for Filing Taxes Late
There are penalties for filing late, and they can be pretty steep for those that owe a balance. The CRA will charge you a penalty of 5% of your owed balance plus an additional 1% for every month that your tax return is late. These penalties can go up too, doubling in fact, if you continuously file late. Even if you cannot afford to pay the entire balance owed to the CRA, Chartered Accountants recommend paying at least a portion to avoid late filing penalties. It is always a good idea to file your taxes on time even if you cannot pay on time to avoid some of the penalties.
In additional to financial fees and penalties, people that file late may have their government benefits interrupted. To receive certain federal or provincial benefit payments one has to file an annual return. If you file late, or not at all, these payments may be interrupted. Taxes are used to assess eligibility for programs so if you file late your information won’t be processed in time meaning you will receive your benefits later.
Programs that are affected by this include:
• Canada Child Tax Benefit
• Universal Child Care Benefit
• Working Income Tax Benefit
• Guaranteed Income Supplement
• GST/HST Benefit
• Ontario Trillium Benefit
I Filed Late: Now What?
File your taxes as soon as possible once the deadline has passed. Your penalties get steeper each day past the deadline. Make sure that all of your information is correct to avoid causing even more trouble. There is something called voluntary disclosure. It means that if you did not file in the past or filed late and then submit the forms before the CRA audits you or asks for the documents, you will not get in as much trouble. In this case, you will only be required to pay the amount owed plus interest.
How to Avoid Being Late
The best thing is to avoid filing taxes late at all costs, as there are heavy penalties for those that do. Start getting all the information you need for taxes early to avoids stress and last minute scrambling. Do not wait for the deadline either – file your taxes as soon as you are ready and able. Hiring a Tax Accountant is always a good idea as well. They can help you find the right documents, make the calculations, and make sure you make the deadline.