Tax Filing Obligations
As a resident of Canada receiving taxable income, you are obligated to file an annual T1 Income Tax Return each year. Canadian Corporations have an obligation to file annual T2 Income Tax Return. In some cases, Partnerships and Not-For-Profit Corporations must file annual Information Returns. Businesses who are registered for HST must file remittances each month, quarterly or year depending on the size of the business.
Many individuals or corporations are not up-to-date with their Income Tax Returns or GST Remittances.
If you have several years of outstanding returns, the CRA could issue arbitrary Notice of Assessments which demand that you pay tax on false earnings. These types of assessments typically require you to pay more tax than you would have if you had filed returns. This is because in notionally assessing you, the CRA imputes the highest earnings figure and does not consider business expenses to offset business income or Input Tax Credits to offset GST/HST owed.
You may also face late filing penalties. If you owe taxes and did not file your income tax return on time, the CRA will charge you a late filing penalty of 5% of the income tax owing for that year plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months. Repeated late filing penalties increase the penalty rate to 10% for that year plus 2% per additional month.
What to Do to Correct Unfiled Returns
If the CRA has not contacted you regarding your late filings, you may be eligible for the Voluntary Disclosure Program which would allow the CRA to waive some or all of the penalties and some of the interest levied. If you are eligible for the program, we will prepare and submit this application for you.
Next, we begin to prepare the outstanding returns. If you have been notionally or arbitrarily assessed, we will replace the false figures with actual amounts, which will substantially lower the income tax or GST/HST that you owe. If you have not been notionally assessed, we will prepare and coordinate the fresh filing of your returns, including personal income tax returns, corporate income tax returns, GST/HST returns, and payroll remittances.
Why you Need a Tax Lawyer
If you have not filed your T1 Income Tax Return, T2 Income Tax Return or GST/HST returns for yourself or your corporation, contact our firm for assistance today. We’ll obtain the ideal outcome for you and seek the elimination of penalties and reduction of interest that would otherwise be levied to you if you filed on your own.
With years of experience in corporate and tax law, Kalfa Law is your premier partner for all your tax needs in becoming up-to-date with your tax filing obligations and minimizing penalties.
Unfiled tax returns? We’re here to help™.