What happens if I file my taxes late?

Here are some unexpected consequences to not filing your taxes on time.

Canada Child Benefit

If you don’t file your taxes on time, you may not receive your payment.

Sale of Principal Residence home since 2016

You now have to declare the sale on your personal tax return. Capital Gains are still exempt from tax, but you could face penalties of $100/month, if you are late filing the tax return for either of these years, or if you did not report the sale when you filed. The max penalty is $8,000.

Penalties

Penalties can be costly at 5% of your balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months. Being a year late would cost you 17% of balance owing.

If you were also late filing in the 3 years prior, the late-filing penalty may be 10% of balance owing, plus 2% per month, up to a max of 20 months. Being a year late would cost you 34% more. Being more than 20 months late would cost you an additional 50%.

These fines get worse if you repeatedly fail to report income, make false statements or omissions.

Interest

5% per year, compounded daily. Starting on the day following the payment due date.

If your tax balance due is zero or a refund, you will not incur any penalties or interest.

While deadlines can be overwhelming, our team can offer you tips and tricks on how to stay organized and avoid penalties. We have a proactive approach and use the latest technology to keep you on schedule when it comes to everything from payroll and bookkeeping to filing taxes and GST.