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.

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