When handling your income taxes, it is extremely important that you file an accurate tax return and make payments on a timely basis. Failure to do so can result in the assessment of additional interest payments and late-filing back tax penalties.
If you have any unpaid back tax amounts owing tax year, you will be charged interest on your back taxes starting May 1st of the following year. . Interest is also charged on any penalties that arise due to a reassessment of your tax return. The interest charged is compounded daily and may change every three months. Outstanding back tax balances from previous years are also subject to interest charges. Any back tax related payments made are applied first to the amounts owing from previous years.
If you do not file your income tax return on time, you will be assessed a late-filing penalty. This penalty is 5% of your balance owing, plus 1% of your back tax balance for each month your tax return is late. If you were also charged a late-filing penalty in previous years, the penalty is higher. If you are a repeat offender for filing late, your r late-filing penalty may be up to 10% of your balance, plus 2% for each month your return is late (maximum 20 months). Even if you are unable to pay your back tax balance owing on or before April 30th , you can still avoid the penalty by filing on time. This penalty may be waived if your return is filed late due to circumstances beyond your control.
NOT REPORTING AMOUNTS ON YOUR RETURN
Repeated failure to report amounts on your tax return can result in the assessment of 'failure to report' penalties. The federal and provincial penalties are each 10% of the amount you failed to report. However, these penalties may be waived if you later voluntarily report an amount that you did not include on your tax return. It should be noted that for residents of Quebec, only the federal penalty applies as provincial taxes are assessed by Revenue Quebec.
MAKING FALSE STATEMENTS
In addition, if you knowingly make a false statement or omission on your tax return, you must pay a penalty. The penalty is equal to the greater of the following: $100; or 50% of the understated tax/overstated credits. However, if you later report this voluntarily the penalty may be waived.
Maximize Your Back Tax Savings With Tax Doctors Canada
When submitting your tax return, it is important that you follow the proper procedures, from reporting all amounts to filing on time. If problems occur, attempting to handle your own back tax issues can be stressful and result in paying more tax than you have to. Tax Doctors Canada can help ensure that you are paying the minimum income tax possible and clear up any problems you may have with late filing and back taxes. Tax Doctors Canada has an unmatched record of success when it comes to saving you money with your back taxes.
Tax Doctors Canada offers a stress free Initial No Obligation Phone Consultation with one of our professionally certified tax accountants. We Welcome Your Business!
Tax Doctors Canada, a division of GTA Wealth Management Inc, has 3 office locations (by appointment only) in Toronto, Markham and Mississauga to serve you. You can also have one of our certified tax accountants assist you with your personal tax return requirements remotely from the comfort of your home utilizing Tax Doctors Canada's secure document transfer portal. We accept clients from Canada and worldwide.
