Apr 29, 2019
Personal Investor: Late tax filing penalties could add up
By Dale Jackson
Personal Investor: Late tax filing penalties could add up
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The day that seemed a long way off on New Year’s Eve has come. Midnight April 30 is the deadline for most Canadians to file their 2018 income tax returns. The Canada Revenue Agency (CRA) would like to have a look at everyone’s finances by then but – let’s face it – it’s the ones that owe them money that they’re really concerned about.
If you owe, the meter begins running May 1. Five per cent interest is compounded daily on the amount owed, plus one per cent for each full month that the return is late, to a maximum of 12 months.
If a year passes and the CRA is still not paid, 10 per cent interest is charged on the balance owing plus two per cent for each full month, up to 20 months. The rate is subject to change every three months.
The CRA doesn’t say what happens after that but it can’t be good.
If you are found to have made false statements or important omissions, you could be fined $100 or 50 per cent of the falsified amount, whichever is higher.
If you have made false statements or important omissions and fess up through the Voluntary Disclosures Program, the CRA could be lenient. Taxpayer relief provisions are provided for individuals who are victims of circumstances beyond their control.
Tax professionals can help broker a satisfactory arrangement but it’s important to get qualified advice before things spin out of control.
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