Tax season is here! A large number of individuals end up missing the personal tax deadline, which is May 1st, 2023 this year. The deadline usually falls on April 30th, but as this falls on a Sunday this year, you have until Monday, May 1st.

By this date, you should have your taxes filed and any money you owe paid off. But what actually happens if you pay your taxes late? Paying late incurs a late-filing fee and you may be charged interest on your money owed. Compound daily interest begins immediately and how much this will be, varies as the rate is subject to change every 3 months or so. Corporate taxpayers are likely to see an 8% interest rate.

The Canadian Revenue Agency has stated that the penalty for filing your taxes late with a balance owed will be 5% of your previous year’s balance owed, plus 1% of every month you are late. Paying late through installments will also see an installment interest rate applied.

If you can’t pay on time, you should still file your taxes on time to avoid penalties. You also have the right to request a waive of any penalties or interest charges due to circumstances out of your control. The Canadian Revenue Agency can only grant this with a 10-year span.

Talk to our team of experts today to help you file your taxes and avoid penalties.