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Tag: tax filing deadline

  • Canadian Income Tax Filing Deadline Coming Up: What To Do If You Can’t Pay

    The new Canadian income tax filing deadline is coming up soon — on June 1, 2020.

    Is your return ready to file?

    Due to COVID-19, the income tax filing deadline was moved from the usual April 30 to June 1.

    If you owe, the deadline to pay has been moved to September 1, 2020.

    But can you get the money together in that time, or do you need extra assistance?

    Here’s everything you need to know.

    A) Don’t Delay Filing

    First, don’t delay filing your return. Even if you have lost your income due to COVID-19, you still need to file. If you miss the June 1 deadline and will owe, you may be charged a late-filing fee, which will only add to your final balance.

    It’s in your best interest to file by the June 1 deadline. If you will owe and can’t pay, read on…

    B)  If You Need To, Use the Three-Month Deferral Period to Gather Funds

    As we mentioned, this year you have three months to actually pay for what you owe. The deadline to pay your owed income tax return is September 1.

    Unlike in previous years, you will not be charged interest between the filing deadline of June 1 and the new payment deadline of September 1. So, if you need more time to collect what you owe, this break can give you that.

    But be sure that you will have the funds by September 1 (or sooner). If you can’t pay, you will be charged interest after September 1. Plus, if you don’t pay you will no longer receive any GST/HST credits or Canada child benefit payments from October 2020 forward and you’ll have to repay the estimated amounts that were issued to you starting in July 2020.

    If you won’t be able to pay, read on.

    C)  If You Know You Can’t Pay, Explore Your Options

    If you will not be able to pay by September 1, you need to act now.

    A debt consultant (like DebtCare Canada) will review your situation to help you find the best option for you. This might include:

    • Cleaning up other debts to free up money for your tax payment.
    • Accessing home equity to pay what you owe.
    • Filing for insolvency (bankruptcy or a consumer proposal).

    DebtCare also provides access to one of the only programs that can resolve a CRA back tax problem.

    In this program:

    • Your principal tax debt can often be reduced.
    • Interest and penalties immediately stop.
    • You are able to make a single monthly payment.

    Don’t wait to explore your choices. The sooner you start, the more options you will have.

    At DebtCare Canada, we offer a free consultation to deal with tax problems. Tax evasion is illegal. Get ahead of your tax issues.

    Contact us by calling or texting 1-888-890-0888 or visit www.debtcare.ca to learn more.

  • Missed the Tax Deadline? Read Our Complete Guide to CRA Penalties and Interest

    The 2018 personal tax filing deadline was April 30, 2018. Seeing as we’re now in August, if you missed it and you owe money, you’ve likely racked up Canada Revenue Agency (CRA) penalties and interest by now.

    Late-Filing Penalties and Interest

    According to the CRA, late-filing penalties and daily compound interest start accumulating on May 1, 2018 for any unpaid amounts owing for 2017. You could be charged:

    • 5%of your 2017 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.
    • 10% of your 2017 balance owing, plus 2% of your 2017 balance owing for each full month your return is late, up to a maximum of 20 months, if you’ve been charged a late-filing penalty on your return for 2014, 2015, or 2016.

    The above amounts are what you could be charged after filing your tax return late. However, if you decided to not file at all, the consequences could be even worse.

    Failure to Report Income Penalty

    If you fail to report an amount on your return for 2017, and you also failed to report for 2014, 2015, or 2016, you may have to pay a federal and provincial/territorial repeated failure to report income penalty.

    Any amount of income of $500 or more that was not reported is considered a failure to report income.

    These penalties are each equal to the lesser of:

    • 10% of the amount you failed to report on your return for 2017; 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.

    False Statements, Omissions, and Gross Negligence

    If you make a false statement or omission on your 2017 tax filing, you could be charged an additional penalty:

    • $100; and
    • 50% of the understated tax and/or the overstated credits related to the false statement or omission.

    This penalty can be charged whether you knew about the false statement, or if it is caused by “gross negligence,” for instance if you paid somebody else to file your return for you (like an accountant) and they made an error. Even if you pay somebody else, you are still responsible for the accuracy of your return.

    CRA Collections

    If you fail to pay an amount owing on your tax return, the CRA can begin collection action. This can be financially devastating, and publicly embarrassing. Common collection action includes a wage garnishment, a frozen bank account or putting liens on your assets.

    The CRA can begin collections without warning and without a court order. Once a collection action is in place, it becomes even harder to negotiate with the CRA. If the CRA has started collection action, time is not on your side. The only two things that can force a CRA collection action to stop (besides paying the debt in full) are filing for a consumer proposal or filing for bankruptcy.

    What to Do

    If you’re reading this blog, it’s possible that you’re several months behind on filing your tax return, or you haven’t yet paid back the amount you do owe. If this is the case, you don’t want to delay it any longer — that will just result in even more charges, CRA collections, and potential court action for tax evasion. But you don’t have to go it alone.

    You need an expert that can look at your whole financial picture and put together a plan that will work for you.

    At DebtCare Canada, we can help with your tax debt, whether it’s personal income tax, HST, or payroll. We provide access to one of the only programs that can resolve a CRA back tax problem.

    Contact us today for a free consultation. Call 1-888-890-0888.