Too busy to do a return? Wondering what might happen if you don’t file taxes? Most likely the road to ruin. Here's why doing taxes each year is a must.
If you’re a working adult with a certain amount of annual earnings, you need to file an income tax return with the Canada Revenue Agency on or before April 30 every year. Your tax return must be accompanied by a cheque that covers the taxes you owe, if any.
Thinking you’d prefer to opt out of this chore?
Consider what could happen if you don’t file your taxes—the first being you are deemed to be breaking the law. Are you willing to risk it?
What happens after May 1st?
If you choose not to declare your income by April 30th, you’re on thin ice. Sooner or later, the Canada Revenue Agency will require you to file a return. If you decide to ignore their request, don’t fool yourself that they’ll eventually forget all about you.
- As of midnight on May 1, interest will be added to your bill.
- You’ll also be charged a late-filing penalty. The charge is hefty, too: according to CRA, it's five per cent of the amount owing, plus an additional one per cent for each month it’s late.
Our advice? Don’t bother wondering what will happen if you don’t file your taxes. Do whatever it takes to finish up your income tax returns and send it in, even if you think you can’t currently pay what you owe.
- To prevent this from happening again , consult a tax expert or debt counsellor. Either one can give you some valuable tips on how to better manage your income tax filing and deductions.
Unable to pay what you owe?
If you can’t pay the full amount you owe to the government, contact an agent of the Canada Revenue Agency without delay. It may be possible to arrive at an agreement that allows you to spread your payments out over several months.
In certain circumstances, the CRA may apply tax relief measures, such as cancelling a penalty or interest. This might happen if you:
- Lost your job.
- Were affected by a disaster, such as fire or flood.
- Were subjected to a major circumstance beyond your control, such as illness or a serious accident.
Did you know?
If you choose not to pay the taxes you owe, you may cause yourself some serious problems. The CRA may initiate the following proceedings to recover their money:
- They can seize your pay or a partial amount thereof.
- They can also seize your property until the amount owed is repaid.
Even if you think you can’t pay what you owe, don’t hide your head in the sand. It’s very important to file an income tax report, because if you don’t, you’ll only have to pay much more in the long run.
