For Canadians, there is a penalty for not filing their taxes on time. There is no way of getting out of this system of paying taxes. While it may appear to be cheaper, working out the figures and doing it yourself can cause a number of problems. Also the tax bills can end up much higher than they need to be. Canada late tax filing will guarantee you a late filing penalties accrued as well as an interest that will be charged on the outstanding tax owings.

In addition, you will be going through the process with loaded stress. To keep within the law, you need to have all the details in to the authorities by midnight on the 30^th April each year. It has to be in by this date or there are a range of penalties that can be levied onto the account. Normally this will include 5% of what is owed, a further 1% of the outstanding balance that is owed for each month that the bill is unsatisfied and this will continue until 12 months has been reached. Canada late tax filing incurs increasing charges the more that it happens. If there has been a penalty levied in the previous 3 years, there will be additional payments passed on to you for this second late payment.

Under these circumstances it will be 10% of the amount outstanding along with 2% for each month that it is not paid, and unlike with the first occasion the limit being 12 months, here it will be 20 months. It is clear that when living and working in Canada, Canada late tax filing is to be avoided and the best way to do this is to have someone help with the job. By employing a company to take over the strain and sort out the taxes, life will be much easier. To make sure that there are no problems at all, they can take over the whole process and make sure that not only is the return filed on time, but it will be filed correctly and won?t leave you open to challenges in the future.

A further spanner in the works can be when the interest rate changes and it is possible for this to happen every three months. If you are not aware of this you could be caught off guard, but if you have professionals working on your behalf, they will be aware of these changes and will make sure that your tax owing to be kept to the minimum. There are certain times when it will be possible to have the fees refunded when Canada late tax filing occurs, but again it will be best to use a professional company as they will know the law, and understand what is likely to be successful and what will fail.

Unfiled taxes are a common problem faced by many individuals. The better you know about them, the more you are prepared to handle the situation arising from it. So before we go into what can be done to tackle the unfiled taxes or late tax filing situation, let us first consider the most common reason behind them.

Main Reason

One very common belief associated with unfiled taxes is the thought that the amount to be paid will be more than one can afford. This is the prime reason for which individuals do not file tax returns or even if they do they do it late.  The problem exceptionally gets out of control when these unfiled taxes are not filed for years and are unnoticed by tax payers until they snowball large enough to crush you under.

What To Do

The best way to counteract the burden that will arise after ignoring years of unfiled taxes is to act as soon as possible and even before that gain as much knowledge regarding the matter as possible. Acting without exploring all consequences will also cost you more. Many a times people panic and file their taxes without understanding the personal consequences and pay for it in form of hefty interests and penalties charged by CRA (Canada Revenue Agency) in lieu if late tax filing.

CRA Penalties

It should be known that any penalty charged by CRA in lieu of unfiled taxes will be on top of owed taxes. Penalties resulting due to late filing can be quite high at times especially if it is on a repeat offender. In case a person owes taxes and has not filed them on the set time, first time default penalty can be as high as 17% of the total owed tax amount. In case the offense is a repeated one and a repeat occurrence of not filing taxes arise, the penalty amount can go as high up as 50% of the total tax amount.

CRA Charged Interest

Also added with the above mentioned penalties, CRA also charges interests on balance tax and penalties that are compounded on a daily basis and are quite high compared to the interests charged by banks or other financial institutions. For any individual who has years of tax owing on him, it should not be surprising to see that more than half of all the payable mount constitutes of interests and penalties.

In Case of Not Filing Taxes

For those who have not paid their taxes for years and do not plan to file taxes as well bear the risk of being convicted and charged with criminal offenses including tax evasion. CRA also practices the notifying of such guilty pleaded individual in public all over Canada.

What to do

The best way to handle your tax filing situation is to hire the expert services of a tax provider who has experience and expertise to deal with tax agencies and can resolve your problem reaching a satisfactory resolution and helping you in every way for late tax preparation.

What to Consider When Choosing a Tax Service Provider

Your chosen tax service provider should hold the necessary expertise such as CRA former auditors, accountants and individual with thorough knowledge of Canadian tax system, along with the experience to deal with similar cases as your own. Tax SOS is one company that has a record and experience of providing numerous individuals with the best possible outcomes to their problems. Tax SOS has been the best choice for many when it comes to filing tax return Canada.

Summary

The increasing number of late tax filing indicate that majority of individuals are unaware of the consequences of unfiled taxes. In order to properly understand the consequences and be better prepared to face the penalties and interests imposed by CRA, it is always best to have as much unfiled tax related information as possible; to save as much of your hard earned money as possible from being spent under the penalty head.

Filing income taxes past years could be a complicated affair. It is important on your part to get the pending things done right by seeking expert help from tax accountants in Canada. It is always safer to get professional guidance if you have a tax situation which is complicated, when you own property, you earn income from several sources or when you have considerable medical expense. This becomes more complicated when you have missed out on filing your tax returns for the past few years.

You can file income taxes for past years at any time within a ten-year period. You can file these taxes at any time and also receive refunds up to ten years back if you are in Canada.

April 30 is the deadline every year for Canadians to file their personal income tax returns for the previous year. If you happen to miss out on your previous filing dates, you cannot take a decision to skip the payment altogether. This would also depend largely on whether you actually owe the tax to CRA or not.

The adage of ?death and taxes being certain? comes out true as the Canadian government wants a tax return filed even if a person ceases to exist during a tax year. In such a case, the person responsible for acting on the dead person?s behalf for his estate has to file the concerned person?s income taxes for past years by April 30^th of the following year. This is applicable unless the concerned person dies in November or December; in such a case, the tax returns are due within a period of six months from the date of death.

You have to note that if you are late in filing your income taxes past years but if you do not owe any taxes, then there will be no question of any penalties to be paid to the CRA. There will, however, be a financial hit that you will have to take. The Canadian government will hold on to any refunds that are due to you until you file your income taxes past years and there will also be a delay in getting your benefit pay-outs that you may be eligible for like the GST or Child Tax Benefits.

It is wiser to file your income taxes past years as there may be accumulated credits due to you based on your tax returns. If the government does not become aware of your income source, the credits due to you will never be sent to you. If it is determined that you owe taxes to the CRA and you decide not to pay your taxes by not filing your returns, then penalty charges will pile up against you beginning from 1^st May of every year. The interest will be charged on a compounded rate on a daily basis on the amount which is unpaid.

People in Canada are not fully aware that they will be charged heavy penalties by the CRA for tax unfiled and late filing. The penalties become hefty, particularly for defaulters who become repeat offenders. So, if you owe taxes and are not filing your tax returns on time, you can expect first time late filing charges to be up to 17% of the tax amount due to the CRA. When the late filing incident is deemed as a repeat occurrence, the penalty can even be hiked up to 50% of the tax amount due.

Apart from the penalties for tax unfiled and late filing, the interest charges on the tax amount balances are much higher than the rates charged by the banking institutions. These interest charges are compounded on a daily basis. When people pile up back taxes for several years, it will not be surprising to observe that the penalties and interests will make up more than half the amount of the actual tax amount payable. The interest keeps piling up at an alarming rate.

Late filing and tax unfiled may even result in criminal charges against the defaulters. Despite this threat, many individuals and business owners in Canada have problems of tax unfiled. One of the principal reasons why the taxes may not be filed on time is because many people feel that by filing of the tax returns, they may owe amounts which they are not in a position to afford to pay. This problem gets more complicated as tax arrears pile up for more than one period of assessment.

?People with tax unfiled require services of a firm of tax accountants or tax service providers. The cost of hiring these services is worth it for the experience and the knowledge that these providers possess. Under Sections 238(1) and 239 (1) of the Canadian Income Tax Act, tax unfiled or late filing for a period beyond one year for a tax amount due is a criminal offence.? Failing to declare income which is taxable or concealing it is an offence which is punishable by financial penalties as well as by imprisonment.

Most people make the mistake of thinking that they are off the radar with tax unfiled; but, that is not the case. CRA keeps a tab by monitoring the financial behaviour over a period of time. They use identification tags like Social Insurance Number or the date of birth of a person to access data from the bank accounts, credit card transactions or the acquisition of property or any other possessions. The longer they allow a taxpayer for tax unfiled, the higher is their revenue generated in the form of penalties and daily interest on the tax amount payable. The longer the period of tax delinquency is stretched, the easier it becomes for the CRA to establish a criminal case for evasion of tax.

Once a person is convicted for tax unfiled, the penalties can soar as high as two hundred and fifty per cent of the actual tax amount due to CRA in addition to the daily interest compounded charges. Imprisonment could involve a jail term of up to two years. The taxpayer?s reputation also gets tarnished with this kind of a criminal record for tax unfiled.

It?s not a pleasant situation and one you personally, as well as professionally, should try to avoid at all costs, because no matter how fervently you wish it would go away, unfiled tax returns will not be ignored by the CRA. This makes perfect sense as your government agencies are funded through tax dollars and need these monies to survive, as well as provide services to other individuals who do pay their tax bills.

These are just some of the scenarios that can occur with an unfiled tax return, blatantly incorrect or late tax return:

• Lending agencies such as banks normally insist upon financial paperwork like a tax return to illustrate your monetary situation. If you have unfiled tax returns or even a tax problem, this could adversely affect your credit and severely reduce your ability to receive a loan. Even if you can receive the money, it?s highly possible you will be paying an exorbitant interest rate that will never be reduced.
• Subsidies from the government like stipends for elderly residents or children will not be disbursed if you have unfiled or late tax returns. That means if your family needs these services they will not be available to them.
• Even if you only have a late tax return, the CRA will naturally assume you do not intend to pay your taxes. They have no intention of providing tax relief for you or your business.
• When the CRA unearths you have even one late return, they will issue paperwork called a notional tax assessment which will persist as a binding tax liability and could be more than triple, once all fees are tabulated, what you actually earn each year.
• An unfiled or late tax return may injure a work colleague, business associate, long-term partner, or husband or wife. The CRA has no qualms about assigning liability for your tax owing or linking it to people close to you financially. They want their money in some fashion even if it means ruining someone else?s financial stability
• Each year you do not pay taxes or have a late tax return the CRA will institute noncompliance fees, fines, and interest accrued on your tax bill. The CRA will double your bill every five years for each year you have not filed and this undoubtedly will cripple you financially for the rest of life.
• If you think shifting your assets and fund to another party such as your husband or wife, or a business partner, think again. This will place the person or persons in just as bad of a financial situation with the CRA as you are. Also, the CRA will require you to submit data on all that you have transferred, if you do not submit it, this is considered to be a criminal act and the CRA can move forward with this charges and prosecute you. They also have the same ability to apply the same treatment to the party or parties who remain in control of your financial assets.

Every individual or business organization earning income and profits respectively is required by the law to file their taxes on a yearly basis. Taxes are basically the primary source of income for governments and it is used for the development and improvement of the country. Filing a tax return Canada is essential and obligatory for individuals and businesses that are earning money. Fines and penalties are levied on those who do not pay their taxes and they will increase over time. Therefore, everyone is advised to file their returns as soon as they become due and avoid any problems in the future.

Problems with unfiled taxes

However, approximately over six percent people forget or neglect to file their tax returns on a regular basis. They end up encountering the problems of unfiled taxes that can prove to be immensely complicated for them. The implications of not filing should be understood by people for ensuring that they do so on time. If a tax return is left unfiled, the CRA may do arbitrary assessment that may increase the amount due. They may also have to deal with penalties of late-filing, which can further boost the costs. Also, the company or individual may also be subject to legal action by the tax authority, which can create even further problems.

Apart from that, there are often time limitations for collecting a tax refunds and not filing on time would mean that people will lose their refunds and thus have to pay a high amount of tax. If tax is owed with the return, late tax filing means that severe penalties are applied. Interest charges may also have to be borne on the tax along with the penalty. Also, regardless of the number of years that pass without filing a tax, it doesn?t mean that the obligation goes away with time.

Solutions for unfiled taxes in Canada

If people are having tax troubles and need to get out of it, they should file their returns. Late tax preparation involved filing all your pending and unfiled ?taxes returns. The first step to undertake is to determine the years that require filing. ?People can contact CRA if they lack any records of when they last made their filing. The next step requires people to gather all the necessary documents that are needed for the filing process. This includes income documents such as T5008, T4 or T5 slips or other income slips/forms and other tax-related documents as they are all crucial for filing returns.

Obtaining the tax forms is the third step that should be taken in the case of late tax filing. The correct form should be used for every year. This means that the current year form cannot be used when filing for taxes of the previous year. People who are aware of the tax codes and laws can file their returns on their own. They can also hire professional for filing their back returns and figuring out whether individuals are going to get a tax refund or owe to the CRA.

If you need help with unfiled taxes and are given urgent deadlines to file, call Tax SOS right away to ensure a timely and professional completion of your tax filings at 1-877-982-9767