The deadline for filing a tax return in Canada is April 30. If you do not have a balance owing on your tax return, there are no penalties for filing late; however, filing late may prevent you from receiving tax benefits to which you are entitled. If you do have a balance to pay, filing late will result in a financial penalty and daily compound interest on your balance and penalty amounts. The initial penalty is 5 percent of what you owe, with an additional 1 percent added for every month that you are late. The annual interest rate on late balances varies, but, as of May 2010, it was 5 percent.
1. Get a four-digit Canada Revenue Agency access code. If you are filing late, it is better to file your tax return using Telefile or Netfile to get your tax return to the CRA as quickly as possible. Telefile allows you to file your tax return over a touch-tone phone, while Netfile lets you file online. To use either of these services, you need the four-digit CRA access code that was sent to you in your tax package. If you did not receive an access code, you can get one by calling 800-714-7257.
2. Get your tax forms or tax-preparation software. If you are using Telefile, you need to prepare and calculate your return using CRA forms. You can download and print these from the CRA website. If you are using Netfile, you need to get a CRA-approved tax-preparation software package. You can find a link to a list of CRA-approved software in Resources.
3. Complete your tax return.
4. Submit your tax return. If using Netfile, simply follow your software’s prompts to send your tax return file to the CRA online. If using Telefile, call 800-959-1110 and enter the information from your paper return when prompted using the keypad on your touch-tone phone.
5. Pay your balance. You should pay your balance as soon as possible to stop the penalties and interest from building. The fastest ways are through the CRA’s My Payment online service, for which you need a registered CRA online account; in person at your bank; or through your bank’s online banking service.
6. Pay your penalties and interest. Once you have paid your balance owing, interest will stop accruing on your balance and penalties. The CRA will send you a notice informing you of what you owe in penalties and interest. You can pay this through your bank, with the CRA’s My Payment service or by sending a check or money order to the CRA.
- Netfile and Telefile can only be used for your most recent year’s tax return. Also, Telefile services are only available until Sept. 30. If you are filing older returns, you must submit a paper return.
- A young woman holding a pen, doing her taxes image by Christopher Meder from Fotolia.com