Missed the Deadline for Taxes? What to Do Next

The government extended the tax deadline by a month to give citizens a little breathing room. It gave them more time to file and to gather the necessary funds to make any payments to the CRA. While some people took advantage of the extension, you missed the deadline. What can you do? 

The Problem: You Forgot the Deadline

The deadline slipped your mind, and now you’ve realized that it’s too late.

The Solution: File Anyways

You’re still allowed to file your income tax after the deadline. The only repercussion that comes with missing the date is that you will be charged a late-filing penalty by the CRA. It is 5% of the balance that you owe. In addition to the 5%, there will be an extra 1% of your balance for each month that the return is late — this ends after 12 months. So, it’s wise not to wait. 

The Problem: You’re in Debt

You know that you can’t make your tax return payments, so you’re avoiding the whole process. 

The Solution: Call for Help

There are two things that you can do. You can call up the CRA to see if they can make a payment arrangement or see if you qualify for taxpayer relief provisions. Or, you can consult a licensed insolvency trustee. Any client that’s worried about paying taxes while in debt can ask the trustee about filing for a consumer proposal to make the repayments much more manageable. 

A consumer proposal is an effective debt relief option that’s growing in popularity. With the help of your trustee, you make a proposal to your creditors — which can include the CRA — to lower the total debt owed. If the majority agrees, you follow a strict repayment plan for a maximum of five years. All late fees, interest and penalties stop. Once you finish, your debts with these creditors are considered paid in full. If you’re wrestling with insolvency, this could be the smartest step for you. 

The Problem: You’re Unsure about the Future

Your financial situation is unstable because of COVID-19. You’re not completely sure if you can commit to any payments. You or a family member could lose your job. You may need to give up work to watch your children. The situation is complicated. 

The Solution: Call the CRA

First, you should know that the tax return payment deadlines have been extended to September 1st of this year. If you file now and pay by that deadline, you will not be charged daily interest. Taking advantage of the extension could be the best step to take when money is tight. 

If that’s not enough, you should call the CRA. They understand this year has been difficult for many people. In a matter of weeks, the country lost millions of jobs because of COVID-19 — either because of social distancing measures or dramatic drops in revenue. Because of the economic repercussions, the CRA has promised to be flexible with individual cases. 

Doing your taxes can be overwhelming. Instead of putting the responsibility on the backburner and ignoring it, make it your priority to address it. File it late. See if you can pay. If not, try the above solutions and then go from there.