Contents
- 1 Individual tax deadlines
- 2 Why do I need to file on time?
- 3 What if my business is incorporated?
- 4 How much will I be penalized if I file my small business tax return late?
- 5 What are the penalties for false statements and/or omissions?
- 6 What happens if I have repeatedly failed to report my income?
- 7 Free Download: Small Business Tax Strategies: A Complete Owner’s Manual
- 8 Book a free consultation with FBC
Last updated: Jan. 25, 2024
Take note of the tax filing and payment deadlines for 2024 (2023 tax year) so you don’t end up paying interest or penalties on late filing or payments.
Individual tax deadlines
Individual tax returns are due April 30, 2024.
If you or your spouse or common-law partner carried on a business in 2023 as a sole-proprietor/self-employed, your return for 2023 has to be filed by June 17, 2024.
If you have an amount owing it must be paid by the May 1st deadline to avoid interest.
Why do I need to file on time?
If you file after the due date, you’re considered a late filer and you could be charged a penalty.
Now, you might be thinking: what if I don’t owe the CRA any money? Do I still have to file on time?
Think about this: after tax season, what if the CRA finds an extra slip you forgot to include in your tax return? Suddenly you owe money.
Since you filed late, you would be charged a late-filing penalty on top of the new balance. It’s good practice to always file your taxes on time.
Even if you cannot pay your balance owing, you should still file on time to avoid being charged the late-filing penalty.
- Individuals: File and pay your 2023 taxes by April 30th, 2024
- Self-employed and spouses: Pay your 2023 taxes by April 30, 2024 (to avoid interest) and file by June 17th, 2024 (to avoid both interest and penalties)
What if my business is incorporated?
Annual returns are due 6 months after the corporation’s fiscal year-end.
If your business is incorporated and has a balance that it still needs to pay, you have until 2 months after the end of your fiscal tax year to pay it off (2 months after year-end).
There are some exceptions to this rule. Canadian-controlled private corporations with annual business income less than $500,000 may have up to 3 months rather than 2 if they meet the eligibility criteria.
How much will I be penalized if I file my small business tax return late?
If you owe tax and you file your return late, the CRA will charge you a late-filing penalty.
The penalty is 5% of your balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.
You will also be charged daily interest on any outstanding tax owing.
For example, if you were to owe the CRA $10,000, you would be initially charged a penalty of $500 for the first year.
The penalty may be higher if the CRA charged you a late-filing penalty on a return from any of the 3 previous years.
What are the penalties for false statements and/or omissions?
The CRA will charge a penalty if a corporation, either knowingly or under circumstances of gross negligence, makes a false statement or omission on a return.
The penalty is the greater of either $100 or 50% of the amount of understated tax.
What happens if I have repeatedly failed to report my income?
If you failed to report an amount on your return for the current tax year and you also failed to report an amount on your return from any of the previous 3 tax years, you may have to pay a larger penalty.
If you did not report an amount of income of $500 or more for a tax year, it will be considered a failure to report income.
The penalties are each equal to the lesser of:
- 10% of the amount you failed to report on your return from a previous tax year
- and 50% of the difference between the understated tax (and/or overstated credits) related to the amount you failed to report and the amount of tax withheld related to the amount you failed to report
However, if you voluntarily tell the CRA about an amount you failed to report, they may waive part of these penalties.
Click here for more information about the Voluntary Disclosures Program (VDP).
Stay on top of your tax deadlines and you won’t have to worry about interest and penalties.
Free Download: Small Business Tax Strategies: A Complete Owner’s Manual
Many small business owners wait until spring to start thinking about their taxes, but this simple act of waiting could cost them thousands.
Now is the best time to start thinking about your taxes. It allows you to get organized and assess what actions you can take before the end of the tax year to lower your future business or corporate income taxes.
Consider this toolkit your roadmap to help you get organized, reduce your tax burden, and keep more money in your pocket.
Book a free consultation with FBC
FBC works with Canadian small business owners to minimize their income taxes and maximize their assets. We can help you stay on top of your record keeping, file your taxes on time and keep you caught up.
We offer tax planning, preparation and audit representation as well as bookkeeping and financial planning to cover your complete financial needs, all available year-round for one fee.
We assign a Local Tax Consultant to each FBC Member, who will come to your home or business, saving you time and money. By learning first-hand about the details of your business, we make sure you benefit from every potential tax savings opportunity available to you.
Interested in learning more? We’re offering a free consultation to explain how you can make sure you’re taking advantage of all the tax-saving opportunities available to you.
