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File your income tax on time

Many taxpayers don’t bother with filing their tax return because they owe money and can’t afford to pay it. This just compounds their problem. If a tax return is not filed on time, for a first time offender, the CRA will charge a penalty of 5% of any tax owing as soon as the return is late, plus an additional 1% for each full month after that up to a maximum of 12 months.

If they are late for a second time within 4 years, the penalties double to 10% of the tax owing plus 2% per month. Interest will also accrue on the penalties as well as the tax owing. If you owed $5,000 in taxes and were a full year late in filing your return, the penalties would amount to $850.

If you failed to file for a second time in 4 years, with the same amount owing your penalties would increase to $1,700.

If you don’t file on time and you don’t owe any money, then there is no penalty. However, if you qualify for programs such as the GST / HST credit, child tax benefit, or subsidies on your medical premiums, you will not receive any of these until such time as you file a return.

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