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.
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.
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.
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.