So you missed the tax deadline of April 30 – now what? First of all, don’t worry! Many people & businesses find themselves in this situation, and the good news is that the team at Liu & Associates can help!
You COULD be penalized with expensive interest and penalties! But, filing a late tax return is better than filing never. If you are in this situation, we can help. Under the Voluntary Disclosure Program our experienced accountants can help you get caught up with your late tax returns. Where the client qualifies for the program, we may be able to help you minimize penalties and interest associated with filing your taxes late.
LATE TAX RETURN PENALTIES
If you owe tax to the CRA and file your return late, you’ll most likely receive a late-filing penalty. This penalty is 5% of the late return, plus 1% of your balance owing for each full month your return is late (maximum of 12 months). If you are chronically late at filing returns, your penalty can increase to 10% of your last late return, plus 2% of the balance owing for each full month your return is late (maximum of 20 months).
What if I don’t owe any tax?
If you don’t owe any taxes, you won’t get hit with a penalty; however, the government will hang on to any refund until your return is filed.
Interest
If you have a balance owing on your tax return, you will begin to get charged compound daily interest starting May 1. In addition, you will also be charged interest on any penalties starting the day after your return is due. If you have any amounts owing from previous years, you will continue to get charged compound daily interest on these as well.
Failure to Report Income
If you fail to report any income twice or more within four years, you could be hit with a “repeated failure to report income” penalty. This penalty is a big one, so it’s best to try and avoid it! Note: If you have failed to report income, and voluntarily tell the CRA, your penalty may be waived. For more information, see Voluntary Disclosures Program.
Exemption of Penalties
In certain situations, you may be able to get penalties waived or canceled. If you fail to meet your tax obligations due to reasons out of your control, you can fill out an application to the CRA to have the late filing penalty waived. See Request for Taxpayer Relief.
CRA Investigations
If you’ve gone a number of years without paying the taxes you owe, filing any tax returns or inaccurately reporting your income, you may get a visit from the CRA. If you are undergoing an audit, check out our tax audit and appeals services.
Filing Taxes Late? Don’t Wait!
Liu & Associates will take a look at your files and help create a solution to your late tax filing, whether you’re an individual or a business or whether you’re in Edmonton or Calgary. Get the reassurance you need – call Liu & Associates to book your tax appointment today!