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I Can't Afford to Pay the Taxes Owed? What Can I Do?

late Pay the Taxes Owed

If you can't afford to pay the taxes owing, you should file your tax return by the deadline to avoid any late-filing penalty. Once you have submitted the return, call the Canada Revenue Agency (CRA) regarding the payment that is due. Under some circumstances, interest and penalties can be waived. More information can be found here.

Penalty for Late-Filing

A late filing penalty of 5% of the balance is assessed. A further 1% of the balance owing will be added for each month that the return is late, up to a 12 month maximum. That would amount to a total penalty of 17% of your balance owing.  Another point to be aware of is that having incurred late-filing penalties in any of the three years preceding, the late filing penalties are doubled. Full details can be found on the CRA web page.

There is Interest on the Overdue Balance

Once you have filed your tax return, a notice of assessment from CRA will be sent. This will show the balance of tax owing.  After the payment deadline of April 30th, interest will accrue on this balance at the CRA prescribed rate of interest, and it will be compounded daily.

If you have any questions, or if you are going to be late filing, contact our office for assistance.

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Friday, 14 June 2024