CRA Tax Penalties: Filing Late Has Costly ConsequencesPosted: April 24, 2018
Posted in: Strategic Thinking, Financial Literacy, knowledge bureau, Evelyn Jacks, Essential Tax Facts, tax courses, tax education, Introduction to Personal Tax Preparation, CRA penalties, online campus, CRA interest rates, late filing penalties, interest on overdue taxes
Have you filed your 2017 taxes? With only a few days left before the April 30 filing deadline, if you haven’t, now is the time! The CRA’s late filing penalties are significant, and the interest rate applied to overdue taxes recently increased, making delayed filing a mistake you just can’t afford to make.
The deadline for personal income tax returns is April 30, and June 15 for those who are self-employed. If you file after these dates, the penalty is 5 percent of the 2017 balance owing, plus an additional 1 percent for every full month you delay filing, up to a maximum of 12 months. If you file late and owe, an additional penalty is applied to the overdue balance, compounded daily starting May 1. Since the prescribed interest rate increase for the second quarter of this year, the interest rate applied now sits at 6 percent, but is subject to change each quarter.
The CRA does have taxpayer relief provisions for those who are unable to file due to specific sets of circumstances. If you file or pay late due to any of the following, the CRA may waive the interest and penalties:
- There has been a death or serious illness in the family that has been a source of distress
- The CRA made an error or significantly delayed responding to you
- You experienced a natural or man-made disaster like a fire or flood
- A civil disturbance, like a postal strike, compromised your ability to file
- You experienced significant personal financial hardship
Note that in each case, it is up to the discretion of the CRA to determine if your circumstances qualify you to have interest and penalties waived. Form RC4288 must be completed and submitted for review.
The CRA also applies penalties for repeated failure to report income, and for false statements and omissions.
Essential education is available to you as a taxpayer and can help you avoid falling into these tax traps. If you file your own taxes, or file on the behalf of friends and family, Knowledge Bureau’s Introduction to Personal Tax Preparation sets the foundation you need to file audit-proof returns on time. Register today and begin your tax education anytime through our online campus. For the best tuition prices, register before the June 15 session deadline. A free trial of this course is also available, along with a preview of integral tax resources, including a variety of tax calculators that will help you plan ahead and ensure you have sufficient funds allocated to pay your 2018 taxes next April.
Additional educational resources:
Also pick up your copy of Essential Tax Facts, by Evelyn Jacks, to give you further knowledge and insight that will improve your ability to file complete, accurate 2018 income tax returns next year.
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