What Happens If I File My Taxes Late?
Y’all seen that tax episode of the Simpsons? “The Trouble with Trillions”?
Flanders files his taxes on January 1, cuz he’s Flanders. On April 15, Homer’s watching the news coverage of the huge lines at the post office, where everyone’s scrambling to file before the midnight deadline. And Homer says, “will ya look at those morons? I paid my taxes over a year ago!”
Don’t be like Homer, sweet friends. But don’t be like Flanders, ‘cause he’s a narc. Be yourself, or, the version of yourself you’d be if you were always on time with your taxes.
Why? Because filing late can get you in trouble and cost you money.
Here are the dates you cannot miss and what might happen if you do.
PS: we get our info from the CRA. Check out this page for more detailed info.
Important Canadian Tax Deadlines 2020
Depending on the kind of taxes you file, you may have a different submission deadline.
Deadline for RRSP, PRPP, or SPP Contributions
The government allows us to make contributions to some tax deferred savings accounts for the tax year that ends on December 31 until March 1 of the current calendar year (so if you didn’t meet the March 1 2021 deadline, you’re gonna have to wait until next year. Put it in your calendar now!).
It’s usually a good idea to make use of this extra time to max out your contribution room. This shelters a greater portion of your income from regular income tax and sets you on a trajectory of good habits for your retirement savings.
Personal Income Tax Deadline in Canada
The big bad date? April 30, 2021.
If you’re filing online, it’s best to file up to a week in advance of the deadline; as the zero hour ticks closer, it’s common for online—especially free—tax software to start crashing and glitching. Why? Because you’re at the digital version of the post office in the Simpsons. Everyone left it late, and now it’s a disaster.
If you’re filing by mail, it’s also best to get ahead of it; you don’t want to wind up stuck in an actual line at the post office, or find there’s a postal delay which might get you in trouble. That said, it’s not required that the CRA receives your filed taxes by the 30th, only that you file them.
Tax Payment Deadline for 2020
Buckle up, babes! The payment deadline is…. April 30, 2021. Yep! Same day as the deadline to file your taxes.
If you’re owed a refund, it’ll arrive in a few weeks time depending on the method of payment you’ve requested from the CRA, generally either by cheque or direct deposit.
If, when the CRA provides your Notice of Assessment, you are found to owe more or less than what you’ve already paid, you’d be expected to make another payment or wait for a refund.
If you are found to owe more than originally calculated on your initial income taxes, you will be charged interest from May 1, 2021. So do your best to get it right the first time, and don’t be late with payment.
Is this very annoying? Yes. Does it make sense? I’m sure it made sense to the person that made the law. But as is the case with most things concerning the CRA: it’s easier to just do what they ask. Woof!
Self Employed Income Tax Deadline in Canada
If you’re self employed, there’s good news and bad news.
The good news: your tax filing deadline is June 15, 2021. The same goes if your partner or spouse is self employed and you’re filing together.
(If your self employment is more related to a tax shelter investment, you have to file by April 30 with everyone else.)
But get this, friends: your payment for the previous tax year is due on April 30, like everyone else.
Generally, self employed folks will always owe taxes because they don’t pay taxes throughout the year. Normally, employers will deduct tax from every paycheque they issue to their employees, and what you take home after those deductions is your net income. This doesn’t happen for self employed folks. So before April 30, get an estimate from your accountant (or do it yourself), and then potentially send in a big ol’ chunk of cash to the CRA.
If you overpay, they’ll refund you in 3 to 1000 weeks, or whatever.
Dunno. We have no answers. Don’t shoot the messenger, eh?
Late Filing Penalties and Interest Fees
Here’s the especially boring bit, straight from the horse’s mouth (I still don’t understand that saying??) as a bonus!
On late filing penalties:
“The CRA will charge you a late-filing penalty if you file your 2020 tax return after April 30, 2021 and you owe tax that remains unpaid at that time. The penalty is 5% of your 2020 balance owing, plus 1% of your balance owing for each full month your return was filed after April 30, 2021, to a maximum of 12 months.”
And on interest charged:
You can find out more about the CRA’s deadlines and fee schedules using this handy webpage.
That’s the vibe, friends. Tax time is boring and can be stressful. Getting ahead of it is the best way to save money and save yourself a headache.
We’re rootin’ for ya. Good luck!
The contents of this blog post are provided for informational purposes only and are not intended as personalized tax, accounting or other professional advice. Every situation is unique and you may wish to get advice from a qualified professional regarding your taxes.