Your taxes were due. If you’re thinking, “I forgot to file my tax return,” you may be feeling a little stressed. But it’s going to be okay! Take a breath – you can do this.
Don’t know where to start? Well, that’s the whole reason I’m writing this article. Depending on what your situation is, there are a number of steps you may or may not need to take to get your financial house in order.
You are expecting a refund
If you’re owed money from the CRA you don’t technically have to file your tax return. That being said, it’s still incredibly important to file. Not only do you not want to give up some of your hard-earned dollars by filing – you may qualify for a number of government benefits.
In addition, for things like tuition credits, you want to make sure you file and include these amounts so that you are able to carry them forward to future years where you might owe the government taxes. You’ll be able to use these amounts to lower the amount you have to pay. So get your papers together!
You owe the CRA money
If you’re in the position where you owe the CRA money, it’s important to get after this as soon as possible because there are interest charges and penalties associated with your late filing. Contacting the CRA through their phone line to explain your situation is a must. If they know you’re working towards getting your return finished and filed, they may not be as punitive when it comes to the charges on your return. The typical penalty is 5% of the balance owing plus 1% of the balance for each month your return is outstanding.
What to do if you’re a year or more late and you owe the CRA money
If you’re in the position where you haven’t filed your taxes in a number of years, there are a few actions you should take to mitigate how much you will owe the CRA.
Complete a slip check.
This can be completed online if you have online access to the CRA or by calling an agent. Essentially, what happens is you walk through all of the slips you might have for each taxation year so that you can ensure you won’t miss anything on your return when you’re filing it.
Fill out your returns.
Online programs such as and allow you to fill out your returns for prior calendar years. It’s important to make sure you use software that was designed for the year you are filing as the rates, credits, and deductions can change from year to year.
Complete the voluntary disclosure form.
When you find yourself in a position where you owe the CRA money from non-compliance, there’s the option to file a voluntary disclosure with the tax returns for the years you have not filed.This gives you the chance to file or correct your taxes and you can be eligible for relief from prosecution and, in some cases, from penalties that you would otherwise be required to pay.
Request a payment plan with the CRA.
Getting on the phone with the CRA can seem like a daunting task but can be beneficial when your tax bill seems too big for you to pay in one shot. If you show that you’re willing to work with the CRA to get the balance paid on your account, they’re sometimes willing to allow you to pay your taxes in portions. This isn’t always the case but if you don’t ask – the answer is always no!
If you feel like you’re out of options, speak with a tax professional
If at any time you feel overwhelmed by your tax situation it is important to speak to a tax professional. While a tax specialist can be pricey, it can be worth it in the end, saving you time as well as a potential headache.
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About the Author
Janine Rogan is a CPA and personal finance writer from Calgary, Alberta. She is a passionate millennial sharing her wealth of financial knowledge with Canadians. Janine has run numerous workshops, spoken at dozens of conferences, and written over 600 articles relating to personal finance. Janine hopes to empower Canadians to take control of their finances and live a value based life. More articles by Janine can be found on her website.
Janine Rogan is a Chartered Professional Accountant, personal finance writer, and public speaker. She is a passionate financial expert who has shared her wealth of financial knowledge at numerous workshops and conferences. Janine hopes to empower Canadians to take control of their finances.