The tax deadline is upon us, and for many this means a necessary hassle we must face annually – but once dealt with, is quickly relegated to the back of our minds until this time next year. For others however, those with a tax debt looming over their heads, tax time brings with it some serious stressors.
As we hope you are aware, the tax deadline this year for personal income tax returns is April 30th. If you have everything in before this date, that’s great, especially if you don’t owe anything. However, if you have yet to file, and think you might owe, it might be prudent to consider the late filing penalties and how they can impact your tax debt – it might just be enough to motivate you to get your filing done.
2013 late filing penalties:
· If you owe for 2013, and do not file by April 30th, you will be charged a late filing penalty of 5% of your 2013 balance, plus 1% of the balance owing for each full month your return is late (to a maximum of 12 months).
· If you were charged a late filing penalty for 2010, 2011, or 2012, your late filing penalty can increase to 10% of your 2013 balance, plus 2% of the balance for each full month (to a maximum of 20 months).
These penalties are steep – and no one wants to get saddled with a major tax debt, plus interest – but what if you can’t pay? If you are thinking about just ignoring that debt, hoping that by not filing the CRA won’t catch on and you’ll be spared the financial strain – think again. The consequences of not filing may mean a notional assessment, where the CRA will estimate your annual income and charge you what they feel you owe based on their findings. Continued failure to pay a tax debt can result in enforcement action, including wage garnishments, frozen bank accounts, even property liens.
So what can you do? If you have filed and owe, or if you have yet to file because you are afraid that you will owe, know that you have options. Don’t ignore that tax debt in the hope that it will go away. Speak to a debt solutions specialist to find out about all of the options available to you to get rid of that tax debt once and for all.
For more information about dealing with a tax debt please contact DebtCare Canada today by calling 1-888-890-0888.