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Missing the CRA Tax Deadline Will Cost You…

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Missing the CRA Tax Deadline Will Cost You…

debt2The 2015 CRA tax deadline is fast approaching – April 30th is less than 2 weeks away! That means that your income taxes need to be filed before this date or you’ll be facing penalties and interest if you owe a tax debt.

If you have a balance owing for 2015, the CRA will charge compound daily interest starting May 1, 2016, on any unpaid amounts owing for 2015.If you have amounts owing from previous years, compound daily interest will continue to be charged on those amounts. Payments you make are first applied to amounts owing from previous years.

The CRA late filing penalty is as follows:

If you owe tax for 2015 and don’t file your return for 2015 on time, you will be charged a late-filing penalty of 5% of your 2015 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.

If you were charged a late-filing penalty on your return for 2012, 2013, or 2014, your late-filing penalty for 2015 may be 10% of your 2015 balance owing, plus 2% of your 2015 balance owing for each full month your return is late, to a maximum of 20 months.

Yes, those penalties will really add up quickly – and can easily become larger than the initial tax debt if left long enough.

If you are thinking about missing the deadline because you know that you will owe but can’t pay right now – this is not the way to go. Owing money to the CRA is not a criminaloffense, but not filing your returns is a criminal offense (this is considered tax evasion) and can land you in more than financial trouble – average Canadians are prosecuted every day as a result.

If you don’t file, how does the CRA know if a debt is owed. Even if you don’t file, the CRA does perform “arbitrary” assessments where estimates of your income are used to determine what should have been paid. Remember, your employer will file and thus the CRA will be aware that you earned income for the year.

If you can’t pay and don’t know what to do, file and then get some financial help. Your first step is to consult a financial professional who can review your income and finances and leverage that to help you achieve a payment arrangement with the CRA that you can live with. This could mean financing or it could mean leveraging other means to stop the CRA from coming after you.

Assuming the CRA will not come after you is never a smart approach – it will.

Stop penalties and interest from accruing today by calling DebtCare. We will help you sort things out: 1 (888) 890-0888.

 

 

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