2017-03-01 00:00:00 Taxes English Review the penalties for filing your tax return late. Figure out what to do if you're missing some of the forms you need to file. https://d1bkf7psx818ah.cloudfront.net/wp-content/uploads/2017/06/08214227/Business-Owners-File-Taxes-On-Time-To-Avoid-Penalties.jpg File on Time to Avoid Penalties

File on Time to Avoid Penalties

1 min read

If you file your tax return late, the Canada Revenue Agency charges a penalty. As of 2017, the penalty is 5% of the tax owed plus an additional 1% per month. For example, if you owe $5,000 in income tax and you file three months late, you face an 8% penalty ($400). To discourage late payments, the CRA doubles the penalty if you have filed late in the last three years. In addition, you also have to pay interest on the tax owed. Even if you don’t have the funds to pay your income tax, you should still try to file on time so you can avoid the late filing penalties; you only have to deal with interest. If your return is already late, you can use Form RC4288 to ask the CRA to waive penalties and interest. The CRA grants waivers to taxpayers who can’t file on time due to disasters, civil disturbances, serious accidents, or severe emotional distress. If you don’t have all the forms you need, consider filling out your return and attaching a note explaining which forms you’re missing and the steps you have taken to get them. For example, if you’re an independent contractor and you’re missing a T4A slip from a payer, you may want to take these steps instead of filing late. Filing your income tax return late can be extremely costly. To avoid fees, try to keep your books well-maintained through the year to make tax time easier.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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