The deadline for Canadians to file their taxes is rapidly approaching and if you haven’t filed the necessary paperwork you could face stiff penalties.
While the usual deadline to file tax returns is April 30, because the date falls on a Saturday this year the deadline has been extended until Monday, May 2 at midnight.
READ MORE: Tax evasion prosecutions in Canada fall dramatically
And for those who are self-employed the deadline is June 15.
Here’s a look at how much you will have to pay for filing late and how it could affect your tax return.
What is the penalty for filing my taxes late?
Robert Kepes, a Toronto tax lawyer and partner with Morris Kepes Winters LLP, works with clients who find themselves in a dispute with the Canadian Revenue Agency and says if you owe the government money the penalties for not filing on time can be hefty. But only if you owe money.
“There is an automatic late filing penalty of five per cent of tax that is owed,” Kepes told Global News. “If you don’t owe any tax or if you’re entitled to a refund then there won’t be a late filing penalty.”
“Right away it’s five per cent and then it’s one per cent a month after that. After 12 months, if you file a year late, the penalty would be 17 per cent of tax owed.”
WATCH: What you need to know about your income tax return
READ MORE: 6 overlooked tax deductions and credits that could score you a big return
But most people don’t have to worry about facing jail time over unpaid taxes, says Kepes, as only serious cases of tax evasion will result in a prison sentence
“They would face prison time only if they were convicted of tax evasion,” he said. “Tax evasion is not just forgetting or inadvertently filing your tax return on time. Tax evasion is a crime and it requires intentional evasion of tax.
“You have to know you’re earning income, and you should be paying tax on that income and you’re deliberately, deceitfully either hiding that income or not reporting it.”
He adds that tax evasion can result in fines or prison time depending on the severity of the case.
- Trudeau tight-lipped on potential U.S. TikTok ban as key bill passes
- Canadian man dies during Texas Ironman event. His widow wants answers as to why
- Hundreds mourn 16-year-old Halifax homicide victim: ‘The youth are feeling it’
- On the ‘frontline’: Toronto-area residents hiring security firms to fight auto theft
How will filing late affect my refund?
Canadians looking forward to a refund on their taxes from the CRA will see it delayed until their tax return is filed.
Kepes says while there are penalties for owing the government money, if the tax man owes you they won’t be in a hurry to pay you.
“And they don’t pay you interest for the first 45 days, but they charge you interest from day one.”
READ MORE: Canadians believe richest 1% are skipping out on paying taxes
Canada Revenue Agency says on its website that filing taxes after the deadline could also result government checks being delayed like the GST/HST credit, old age security payments, and the Canada child benefit payment.
Still haven’t file your taxes? Global News has a list of last minute tips and things to know about this year’s tax season.
Comments