In most cases, the CRA requires taxpayers to submit their annual income tax returns by April 30 of the following year. For self-employed individuals, however, that deadline is extended to June 15 unless the 15th falls on a weekend or statutory holiday. That means the self-employed tax filing deadline will be the next business day.
You may not want to wait until June to file your return, however, as on April 30 the CRA begins charging interest on taxes owed.
We know that being self-employed can leave little time in a day, but stat holidays can be a great time to get started on your taxes, check out when the next stat holiday is here.
Late returns are subject to a late filing penalty, but interest begins to accrue on the balance even before the due date.
Due Date for Tax Payments
Although your payments are not considered late until after June 15, the CRA applies interest on any amounts that you owe starting on April 30, regardless of when they receive your return. If you already have a balance owing, the interest is still accruing…
Avoiding Interest and Penalties
The CRA charges a late filing penalty of 5% of your balance owed plus an additional 1% for each month late. As long as your return is filed by the June 15th deadline, you don’t have to worry about these penalties. However, you still have to worry about interest. Also note that the CRA charges compound daily interest, and their interest rate changes every 3 months.
If you want to avoid interest and penalties on your income tax return, be sure that you know the due dates each year, and if you anticipate owing taxes, consider completing and submitting your return by April 30.
Paying Your Taxes Owed
To make organizing your tax information and payments easy, the CRA offers My Account, an online portal where you can check your benefits, credits, and other tax issues. They also offer My Business Account, where you can track payroll, GST/HST, and other business taxes.
Through these accounts, you can stay on top of due dates and keep apprised of other vital information. However, without either of these accounts, you may still make early payments to the CRA using online banking, debit cards, credit cards, and third-party service providers.
If you have an account at a participating financial institution, you can send money to the CRA in person from your local branch. Alternatively, you can send the payment either by mail or by online transfer.
Keep in mind that you do not have to pay everything at once. If you only have part of the tax you owe, pay what you can and then pay the remainder later. This helps you to avoid some of the interest payments.
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But, if you feel a bit overwhelmed, consider TurboTax Live Assist & Review, Self-Employed, and get unlimited help and advice as you do your taxes, plus a final review before you file. Or, choose TurboTax Live Full Service for Self-Employed and have one of our tax experts do you return from start to finish.