The Importance of Filing Your Tax Returns on Time in Canada

The Importance of Filing Your Tax Returns on Time in Canada

It is essential to know what happens in Canada when you file your taxes late since the significance of filing your taxes on time cannot be overestimated. Individual income tax filers who file their returns after the deadline and owe the Canada Revenue Agency (CRA) money must pay interest on the unpaid sum as well as a late filing penalty, which can be expensive. In addition to a penalty of 1% for each month, if the return is late, there is a late filing fee of 5% of the outstanding sum. While deciding whether or not to timely file their tax return, taxpayers should give this some serious thought. You can also go through the H & T accounting service to learn more about Tax Returns in Mississauga.

If a late filing penalty was given during the previous three years, the punishment is more severe. With a penalty of 10% of the outstanding sum plus 2% of the balance due for each month the tax return is late, up to a maximum of 20 months, it has essentially doubled. You should make every effort to file your taxes on time given these significant penalties. Let’s discuss why it is important of filing your tax returns on time in Canada.

Benefits Are Interrupted

It’s essential to submit your return on time if you receive the Canada Child Benefit or Old Age Security benefits. Every July, your eligibility for each of these benefits is reviewed based on the data from your tax return. Your benefits are also based on the income you report on your tax return, so if you don’t file your tax return by the deadline of April 30th, your benefits could be delayed.

Numbers on your tax return also determine your eligibility for the GST/HST quarterly credit and other relevant provincial perks, therefore it’s crucial to file it on time to benefit from these credits.

Unique Situations

People occasionally encounter unforeseen circumstances that force them to submit their tax returns after the deadline. The CRA occasionally (rarely) waives interest and penalties associated with late filing. You must file Form RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties or Interest, to get taxpayer relief from penalties or interest. But, there is no assurance that you will be given relief, and these submissions must meet extremely precise requirements. To make sure your proposal avoids common traps and has the highest chance of success, it is often preferable to seek the advice of a specialist.

Expert Assistance

It’s crucial to pay your taxes on time; even if you can’t afford to pay all of them by the due date, you still need to file your income tax return to avoid severe penalties. The CRA may be more willing to forego the penalties if you pay a portion of the debt you owe because it shows that you genuinely care about following the rules. It’s essential to speak with a professional accountant if you’re unsure about the best course of action.

Records of Income

Lack of a recent tax return might have an impact on various areas of your life aside from your direct financial situation. The figures on your filed return are used for a variety of additional things, including figuring out:

  • Loans of various kinds such as mortgages, commercial credit lines, and student loans.
  • Grants for students, as well as specific bursaries and scholarships.
  • Low-income grants for initiatives like house repair and heating rebates.

As you can see, submitting your tax return beyond the deadline might have several harmful effects. Even if you are unable to settle your balance in full by April 30th, you should still file. In the long run, you’ll save yourself money and hassles.

Final Words

Many of us may feel hesitant about filing our taxes as tax season draws near, especially if we think we might end up owing money at the end of the process rather than pocketing it. But, for Canadians who are on low incomes, tax season is a crucial chance to take advantage of a variety of federal and provincial tax incentives that can significantly increase their earnings. Additionally, filing taxes can assist them in becoming eligible for additional income-tested benefits provided outside of the tax system. For more learn about Tax Returns in Milton, feel free to contact H & T accounting service in Canada. They provide you with proper knowledge with expert service.