Photo by Daniel Joseph Petty
This blog is not a substitute for the services and advice of a tax professional, but it is intended to give you a general overview and access to resources.
2021 Income Tax Filing Deadlines
The filing of each type of tax return has its own prescribed deadlines.
For example, the income tax-filing deadline for individuals is April 30, 2022, and for self-employed taxpayers – June 15.
However, in a specific year, due to various reasons Canada Revenue Agency (“CRA”) may extend filing deadlines.
This year April 30 falls on a Saturday and therefore, CRA will consider your return filed on time if they will receive it on or before May 2, 2022, or if it is postmarked on or before May 2, 2022, in case you mail your return to the CRA.
Despite tax-filing dates, if you have a balance owing to CRA your payment is due on April 30 (May 2, 2022 – this year) including for self-employed individuals.
Some sole-proprietorship and partnership businesses may opt to follow a non-calendar fiscal year and if so, they have to file the returns six months after the end of their fiscal year. The same applies to filing corporate income tax returns. The deadline for paying taxes owing by a corporation may vary.
Not filing your income tax return on time may result in you or your business having to pay penalties, interest, or delay receiving your tax refund and other benefits administered by the government, like GST/HST credits and Canada Child Benefit.
In regard to GST/HST returns, the filing due dates depend on the business GST/HST filing period which may vary from monthly to quarterly or annual. You are required to file these returns even if you have no business transactions. After you file the returns, CRA will send you a prescribed form if you owe GST/HST for the reporting period. You have to use that form to pay any outstanding amount. In case of a refund, CRA may process it in a 2–4-week period.
What is the Voluntary Disclosure Program?
If you owe taxes to CRA and if you were to file the return late, CRA will add penalties to the amounts owing.
Thanks to Voluntary Disclosure Program (“VDP”), in certain cases, CRA may grant penalty relief and even partial interest relief if the taxpayer comes forward to file outstanding tax returns and/or correct errors and omissions in the other tax filings. Some of the situations where you may take advantage of the VDP application generally are as follows:
- The tax return was not filed and is now late
- Underreported income on a tax return that is already filed
- Ineligible expenses were claimed in the return that is already filed
- Incomplete information was provided in the previous return
The VDP is available to businesses and individuals. It is designed to encourage self-reporting as opposed to CRA conducting its own reviews, audits, and making discoveries. CRA will screen each application to make sure it complies with certain predetermined conditions and there are no guarantees that the VDP application will be approved. One of the most important controls exercised by the CRA is to apply for the program fairly and not to reward taxpayers for avoiding paying the taxes. If CRA identifies intentional conduct on the part of the taxpayer, then it may either deny the application or grant only limited relief. There might be restricted mechanisms to dispute CRA decisions under the VDP.Let’s Talk
What is the Taxpayer Relief Program?
CRA also has another venue for taxpayers to ask for relief, which is called the Taxpayer Relief Program (“TRP”).
Under the TRP, you may be granted relief from penalties or interest if you could not meet your tax obligations due to some extraordinary circumstances, financial hardship, or actions by CRA, etc.
Lastly, if you are not eligible for either VDP or TRP, you may ask for a remission review which is reserved for very extenuating circumstances like extreme financial hardship, mistakes by the CRA, or unintended results of the legislation, etc.
You may apply for these programs yourself or through the professional services of a tax lawyer.
Speak To the Licensed Debt Professionals
Once you decide what you want to do and CRA makes its final determination about the amounts you owe, CRA will expect you to repay your debt to them on mutually agreeable terms. CRA may suggest you obtain a loan to pay your debt to CRA. Consider this option very carefully as it might not improve your financial position. Borrowing money is not free.
Unfortunately, not everyone has the financial means to repay their obligations to the CRA. In these cases, CRA might refer the tax-payer accounts to collections and resort to enforcement actions, such as wage garnishments, freezing bank accounts or registering liens.
If you are unable to pay CRA and need help, schedule a free consultation with one of our Licensed Insolvency Trustees at David Sklar & Associates to learn more about your options. The sooner you reach out for help, the more options you will have.Let’s Talk