In most cases, your tax return has to be filed by April 30 of the year following the tax year. When a due date falls on a Saturday, a Sunday or a public holiday, your payment is considered to be made on time and your return is filed on time if it is received by CRA or postmarked on the next business day. For instance, for the 2010 tax year, you must file your return by May 2, 2011.
If you haven't filed your taxes for several years: get the tax package and forms for the missing tax years from the CRA. Fill them out and send them in.
If you are late this year: If it's past the April 30 tax deadline for this year, you can still file your return online until September 30. Or, you can get the forms, complete them and send them in.
If you file your return late and there is a balance owing, you will have to pay:
- A late-filing penalty. This penalty is 5% of the amount of tax you owe, plus 1% for every month that your return is late, for up to 12 months. That adds up to a maximum of 17% of the tax you owe.
- Interest. If you do not pay the tax you owe by April 30 of any year, the Canada Revenue Agency (CRA) will charge you interest on the amount you owe beginning on May 1. Interest is compounded daily, not monthly or yearly. The rate of interest charged by the CRA (called the prescribed interest rate) can change every three months.
If you file your tax return late more than once, the penalties are doubled. For example, if the Canada Revenue Agency (CRA) charged late-filing penalties for your tax return for any of the 3 previous years, the penalty will be
- 10% of the taxes you owe, plus
- 2% of the taxes you owe for each full month that your return is late for up to 20 months. That's a 50% penalty.
On top of that, if you owe tax from previous years, the CRA will keep charging you interest compounded daily on those amounts. When you make a payment, it will be applied first to amounts you owe from previous years.
Have you failed to report income on your return - again?
If you fail to report an amount on this year's return and you also failed to report an amount in any one of the previous three years, you may have to pay a federal and provincial penalty. The penalties are each 10% of the amount you failed to report.
If you voluntarily tell the CRA about an amount you failed to report, they may waive some of these penalties. You have to meet four conditions to qualify:
- You must approach CRA yourself. If the CRA discovers the oversight and contacts you, you will not qualify for any relief.
- You must offer complete and full information.
- You must be facing a penalty.
- In most cases, the tax owing must be more than one year overdue.
To disclose your situation, you need to complete Form RC199 and include any supporting documentation. Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.