Most people need to file their tax return by April 30th. If you have self-employment income, you have until June 15th to file, but any balance owing is still due on April 30th.
But what happens if you don’t file on time?
If you do not have a balance owing, you won’t be penalized for filing late, but certain credits (like the GST/HST credit or CCTB) will probably be interrupted.
If you do have a balance owing, expect to get hit with a late-filing penalty of:
- 5% of your balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months; or
- if you were charged a late-filing penalty in any of 2011, 2012, or 2013, up to to 10% of your balance owing, plus 2% of your balance owing for each full month that your return is late, to a maximum of 20 months.
That’s why we recommend you file your return on time, even if you can’t afford to pay your balance. For example, let’s say your balance owing is $2,000, but you can’t afford to pay it until October 31st:
- if you file your return on time, you’ll owe an additional $50.63 in interest, but
- if you wait to file your return until October 31st, you’ll owe $50.63 in interest plus a late-filing penalty of $220 (or up to $440 if you’ve been charged a late-filing penalty in the past three years).
In short, filing on time is always better than filing late. If you can’t afford to pay your balance, remember that the CRA’s current interest rate is 5%—much lower than most credit cards. Still in a jam? Consider making a payment arrangement with the CRA.