Last updated: Apr. 30, 2014
It’s April 30 and tax season is coming to an end. Did you make it?
There is a short reprieve this year due to a system outage at Canada Revenue Agency resulting in an extension to May 5.
If you’re worried about a large tax amount owing it’s still better to file by the deadline to avoid the penalties, even if you’re unable to pay the tax balance due.
The penalty for a late tax filing is 5% of the balance owing plus 1% for each month the return is late up to a maximum of 12 months.
If you’ve received a late-filing penalty for any of the previous 3 years, the penalty doubles to 10% of the tax owing plus 2% for each month the return is late up to 20 months.
Interest is charged on unpaid tax and penalties from the due date.
If you or your spouse has self-employment income your due date is deferred to June 15; however, the balance of taxes owing is still due on April 30 (May 5 this year). Interest is charged at a prescribed rate from April 30 and is compounded daily.
Watch for your Notice of Assessment
Once CRA has completed their preliminary review of your filed tax return you’ll receive your Notice of Assessment (form T451).
Once you receive your Notice of Assessment you should confirm that your tax return was assessed as filed or if it has been adjusted by CRA.
If you’re not satisfied with the explanation on your assessment talk to your tax preparer. If you or your tax preparer feel CRA has interpreted tax law incorrectly, there is an appeal process.
Don’t Wait for CRA to Contact You About Unfiled Taxes
While the Income Tax Act provides stiff penalties for deliberately failing to report income or claiming non-deductible expenses, CRA will permit you to resolve these issues without dire consequences if you come forward on your own.
CRA’s “voluntary disclosure” program encourages errant taxpayers to come clean.
If you make a complete voluntary disclosure, no criminal charges, such as for tax evasion, will be laid. And no civil penalties will be applied. You will simply need to pay the tax you owe plus interest.
If you have unfiled taxes, errors or unreported income from past years, contact us now! Before CRA contacts you!
FBC can help eliminate the stress and contact CRA on your behalf.