UPDATED JULY 27, 2020: the Canada Revenue Agency advised that penalties and interest will not be applied to individual and self-employed filers provided they have filed and paid by September 30.

Learn More: /tips/is-the-tax-deadline-delayed-for-2019-tax-returns-11107

 

We know, life gets hectic, and it can be easy to forget an appointment or deadline here and there, but, it’s best not to forget to file your taxes on time, especially considering that the Canada Revenue Agency (CRA) gives you a whole year to prepare.

Here is why it may be important to file your 2019 taxes on time, and what happens if you miss the June 1st 2020 tax deadline for individual filers, or June 15th, for self-employed.

Missed the Tax Deadline: But do not owe taxes

If you file after the June 1st, 2020 Tax Deadline for 2019 income taxes  but you do not / will not, owe any taxes to the CRA, then there will not be any late filing penalties charged, or interest to pay on a balance owing (unless you already have a balance owing). The CRA will hold your refund until you actually file your return. They will also hold off on any refunds or tax credits for other people, such as a spouse or common-law partner. Importantly, they will also be unable to calculate accurately, certain benefits and credits that depend on information from your return.  Examples would be the Canada Child Benefit (CCB) or the GST/HST Credit. If you’ve missed your tax deadline and would like to speak to a TurboTax Live expert to help walk you through how this relates to your specific tax situation then click here!

Missed the Tax Deadline: Owe taxes

If you owe taxes to the CRA and don’t file your tax return by the deadline, this year only, the CRA will not be levying penalties or charging interest, provided that you have filed and paid by September 30. If you file after September 30, the CRA will charge you a late-filing penalty as well as compound daily interest on the penalty.

If you have amounts owing from previous years, the CRA will continue to charge compound daily interest on those amounts. Payments you make are first applied to amounts owing from previous years beginning with penalties and interest.

Your penalties for filing late will be calculated like this:

  • 5% of the balance owing as late filing penalty
  • 1% of the balance owing as additional penalty for every full month you’re late (up to a maximum of 12 months)
  • Interest charged on the above penalty
  • Additional compound daily interest on the balance owing based on prescribed rates by the CRA

If you have become a chronic late-filer, and have been assessed a late filing penalty before, then the CRA has the option to double the late filing penalty for each late filing.  The monthly penalty for each additional month that you are late also increases, beginning from 1% a month to 2% a month (up to a maximum of 20 months).

Self-Employed Deadlines

Self-employed individuals often have balances owing, since their income tax is not deducted at source like it is for salaried individuals, and that balance must be paid to the CRA by September 30, 2020, for 2019 income taxes.  Your 2019 income tax returns are still due on June 15th.

Turbo Tax Tip:

Don’t get stuck with late filing penalties and interest charges this year. Get your taxes done before September 30th, for 2019 individual income tax returns, with TurboTax, the most accurate and easy way to file your return.

Owe Money to the CRA?

You have several options to take care of those taxes you owe.

  • Set up CRA as a payee on your online banking service; your SIN is used as your account number
  • Log in to your CRA My Account and set up a payment directly from your bank account on a set date, or even set up your installments
  • Go to CRA My Payment, which lets you make payments directly as long as you have a Visa® Debit, Debit MasterCard® or Interac® cards.  Note, these are not credit cards, but our debit cards with the VISA or MC logo and an expiry date.  These directly debit your bank account.
  • You can also pay in person at most major banks.
  • TurboTax has partnered with PaySimply to provide Canadians with a variety of options to pay the CRA. There is no account set-up required – it’s available in English or French – and using this safe and secure option, you can choose to use your credit card, e-Transfer, PayPal, cash or debit.  It’s your choice.