Our personal tax services include catching up on tax returns from past years that haven’t been filed yet.
This is a big part of our business! We support our clients through-out the year by preparing past due tax returns. The CRA only requires taxpayers to catch up for the past ten years, but there are advantages to going back more than 10 years.
We see many situations:
- Individuals who were unable to file their taxes due to medical issues
- People scared about how much they might owe. In fact, most of our clients end up with refunds!
- Taxpayers being hassled by the CRA to file delinquent taxes for one or many years
- The CRA has arbitrarily assessed tax returns by estimating their taxable income and creating large tax liabilities with late filing penalties and accrued interest
The last two situations bother our clients, understandably.
There are multiple benefits to catching up on past due tax returns, including:
- People are really afraid of receiving a tax bill that they can’t afford to pay, but according to CRA, about 60% of people who filed a personal income tax return during the 2020 tax-filing season received a refund. Furthermore, if you do end up owing this year, not only can you make payment arrangements and pay in installments, you can take steps to avoid owing next year.
- You may need the filed tax returns to support an application for a loan or mortgage.
- Interest relief on 2020 taxes owing will be given to people who have a total taxable income of $75,000 or less in 2020 and received at least one COVID-19 benefit in 2020
- To be eligible for certain rebates, benefits or programs (e.g. child tax credits and benefits, old age security, provincial medical premium assistance, GST/HST refunds, medication payment assistance, nursing home / community or rental living support, etc.) you need to file your income tax because these programs base your eligibility on your previous year’s reported income level. Filing late can also delay receiving your benefits.
- Even if you haven’t filed your taxes for a few years, or if you missed the deadline, CRA has programs to help you catch up because eventually, they will notice. A lot of refunds also go unclaimed each year because people didn’t file their income taxes. If you file your returns from previous years and realize that you owe money, it’s better to find that out sooner than later, before the fees, penalties and interest get worse. One program CRA has available is called the Voluntary Disclosure Program, and it is open to those who initiate the process on their own, however, eligibility criteria did change in 2018. The thing to remember is that if CRA contacts you first, things change quickly, not necessarily in your favor.
We can help by working with each client to understand their situation, to facilitate the gathering of tax documents and making suggestions for legitimate deductions to improve their tax situation
We can also file Notices of Objection, and applications under the Voluntary Disclosures Program or the Taxpayer Relief Program. To learn more, please see our Tax Advocacy webpage