As an earner in Canada, you are legally bound to making the tax payments to the Canada Revenue Agency. In fact, you need to focus about making your tax payments on time. Failing to make these tax payments on time can lead you towards a variety of negative consequences in the long run. That’s because you will be charged for penalties and interest.
In case if you have any owing balance for 2017, you need to be concerned about the penalties that you will have to face. All people who have owing balances will need to make a daily compound interest payment. This has started from the 1st of May. This would be applicable for all the unpaid amounts of debt, which is owned for 2017.
The outstanding amount includes all the balance payments, assuming that the Canada Revenue Agency assess your returns again. Moreover, the Canada Revenue Agency will charge an interest from the people on their penalties as well. This would start from the immediate date, following the due date of filing. The specific rate of interest that you have to pay will change in every three months as well. You can do your own research on the internet to get a clear understanding about the prescribed interest rates.
If you are having money that you owe from years before 2017, the Canada Revenue Agency would continue charging the daily interest on those amounts as well. Hence, the payments that you make will be applied against the amounts of debt that you have from the previous years. If there is no previous debt, the amount you pay will be applied against debt that you have in 2017.
Late filing penalties
Most of the people in Canada end up with spending a considerable amount of money on the late filing penalties. Lack of knowledge can be considered as the main reason behind the above mentioned fact. If you are yet to make a tax payment for 2017 and if you go ahead and file for the tax return for the year 2017 after due date, Canada Revenue Agency will charge a late filing penalty for you. As per 2017, this late filing penalty is 5% of the outstanding balance that you owe. In addition, 1% of the balance amount that you owe for every single month of late tax return will also have to be paid. This would be counted for a duration of 12 months.
As mentioned earlier, Canada Revenue Agency would charge for your late filing fees for the tax returns on years before 2017 as well. If the Canada Revenue Agency charges for years 2014, 2015 or 2016, the late filing penalty that you have to pay in 2017 will become 10%. In addition, you will need to make a 2% additional payment for every complete month, where your tax return is late. This is applicable for a period of 20 months.
Failing repeatedly to report the income
If you fail to report your income to Canada Revenue Agency repeatedly, you will be asked to make a penalty payment as well. This is applicable for the individuals who failed to report in 2014, 2015, 2016 and 2017. In such a situation, you will be asked to make a territorial, provincial or a federal income penalty. However, you will be accused for this penalty only if you fail to report when the amount of income is over $500 for a given tax year.
The territorial or provincial and federal penalties that you will have to make are equivalent to the reduced amount of:
- 10% of the total amount that you failed to report on the tax return for the year 2017.
- 50% of the different amount that exists in between your understated taxes, which are related to the specific amount that you couldn’t report and the specific amount that is being withheld with related to the specific amount that you failed to go ahead and report.
But still, you are provided with the ability to go ahead and inform about a specific amount that you failed to report. You can do this voluntarily. If you do that, Canada Revenue Agency has got the ability to waive off the penalty amounts that you have to pay.
Penalty for providing false statements
When you submit false statements, you will be asked to make a penalty by the Canada Revenue Agency. Therefore, you should always stick to true and credible statements when you are filing for your taxes. The penalty that you will have to pay for the submission of false documents will either be $100 or 50% of the total understated tax amount that is related to the omission or the false statement. You will need to make a payment equivalent to whatever the higher value calculated by above two parameters.
Waive or cancel penalties
If the taxpayers in Canada are not in a position to meet the tax obligations, Canada Revenue Agency would waive or cancel the penalties. This happens when the taxpayers fail to make their payments due to conditions that are beyond their control. However, it is important to keep in mind that grant reliefs offered by Canada Revenue Agency is limited to a specific period of time. It usually ends within a period of 10 years, where you have made the request.
Now you are aware about how much money Canada Revenue Agency will charge from you in the form of penalties and interest. If you want to stay away from these penalties and interests, you are strongly encouraged to pay special attention towards your tax payments. Then you will be able to keep peace of mind and continue making the tax payments. Any help for financial problems contact gtacredit.com or call 416 650 1100