As Canada’s tax deadline nears, what happens if you don’t file your return? – National

April 30 is the deadline to file and pay your taxes to the Canada Revenue Agency.

If you don’t, you can lose benefits, pay stiff fines or even face jailtime, an accountant told Global News.

“Failing to file taxes by the deadline – there are some serious consequences,” chartered personal accountant Shayan Rashid said.

If you owe money, the late filing penalty is “five per cent of your 2023 balance owing, plus an additional one per cent for each full month that you file after the due date, to a maximum of 12 months,” according to the Canadian Revenue Agency (CRA) site.

That means you could potentially end up paying 17 per cent of any balance you owe, Rashid said.

But if the CRA charged you a penalty for filing late in 2020, 2021 or 2022 and requested a formal demand for  return, the agency site says “your late-filing penalty for 2023 will be ten per cent of your balance owing” plus “for each full month that you file after the due date, to a maximum of 20 months.”

Story continues below advertisement

“That’s just the penalty portion,” Rashid explained.

Breaking news from Canada and around the world
sent to your email, as it happens.

“On the interest portion – this gets fun because now the rate of the CRA is charging is almost 10 per cent … and that compounds daily.

“If you have a balance owing for 2023 and are unable to pay it by the April 30 payment due date,” the agency’s site states, “the CRA will charge you compound daily interest starting May 1, 2024.”

Click to play video: 'Ask the Expert: Tips and tricks for tax season'

Ask the Expert: Tips and tricks for tax season

Rashid said the CRA can take more severe action if someone consistently files late or ignores repeated requests, like garnishing their wages, freezing bank accounts or placing liens on properties.

“We have see the CRA go directly to the employer,” he said, speaking from Oakville, Ont, and that employer would be “required to pay the wages (to) the CRA first” before paying the employee.

Story continues below advertisement

Extreme cases can result in tax evasion or fraud charges, which can lead to jail time, he added.

He recommended anyone who doesn’t owe money also pay on time.

You won’t be charged any penalties, he said, and the CRA could even end up paying you interest.

But he cautioned anyone owing money who doesn’t pay could lose their benefits, like the child tax benefit or the carbon price rebate.

“To keep getting your Canada child benefit (CCB) and related provincial and territorial payments, you must file your tax return on time every year,” the CRA states on its site. “If you have a spouse or common-law partner, they also have to file their tax return on time every year.”

For those who can’t afford to pay taxes owed, the CRA website says Canadians can get in touch to arrange a payment plan.

With just a few days before the deadline, Rashid said about 10 per cent of his clients hadn’t yet paid.

&copy 2024 Global News, a division of Corus Entertainment Inc.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *