The 2018-2019 tax deadline is only a couple of months away – file early to avoid Canada Revenue Agency (CRA) penalties!

April 30, 2019 is the personal income tax deadline for filing 2018 taxes. The self-employed tax deadline is on June 15, 2019.

In both cases, it is better to file early, even if you know you’ll owe. That’s because if you file after the deadline, you’ll be charged penalties and interest by the CRA.

Here’s exactly how much you’ll be on the line for

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/interest-penalties.html

CRA Late-Filing Penalty

• If you owe tax for 2018, and you file your return after the due date of April 30, 2019, you’ll be charged a late-filing penalty of 5% of your 2018 balance owing, plus 1% of your balance owing for each full month your return is late, up to a maximum of 12 months.
• If you have been charged a late-filing penalty for the 2015, 2016, or 2017 tax years, your late-filing penalty could be even higher: up to 10% of your 2018 balance owing, plus 2% for every full month that your return is late, up to 12 months.

Even if you can’t pay your balance in full on or before April 30, 2019, it’s better to file early to avoid the late-filing penalty.

CRA Repeated Failure to Report Income Penalty

If you failed to report an amount on your 2018 tax return and you also failed to report an amount for 2015, 2016, or 2017, you may have to pay an additional penalty. Not reporting any amount of income of $500 or more for a tax year is considered a failure to report income.

The penalty could be:

• 10% of the amount you failed to report on your 2018 return; and
• 50% of the difference between the understated tax related to the amount you failed to report and the amount of tax withheld related to the amount you failed to report.

The CRA has a Voluntary Disclosure Program for amounts that were not reported in the past. If you’re interested in this program, contact us before applying.

CRA Interest

If you have a balance owing for 2018, the CRA can charge compound daily interest starting on May 1, 2019 on any unpaid amounts owing for 2018. This includes any balance owing. The rate of interest can change every three months.

Plus, if you have amounts owning from previous years, the CRA will continue to charge interest on those balances. Any payment you make will be applied to the previous amounts owing.

Note: although the self-employed tax deadline is not until June 15, 2019, the CRA will begin charging interest on a balance owing as of May 1, 2019. For this reason, it is better to file your self-employed or sole proprietorship taxes before April 20, 2019.

If you know you will owe a balance to the CRA that you can’t pay, contact us for assistance.

At Fuller Financial Solutions, we can help resolve your tax problems. If you have an old tax debt or will owe a balance you can’t pay, contact us today for a free consultation.

Call 416-927-7200 or visit www.fullersolutions.ca.

For more income tax filing information, download our free eBook, How to Make a Settlement with the CRA: https://www.fullersolutions.ca/make-a-settlement-with-the-cra/.