What you need to know if you're late filing your tax return

Late filing your tax return? What might happen when you do and what are the penalties? Here are some things you should know.

If you’re filing late, the first thing you'll need to do is get all of your paperwork sorted out.

• Do you have all the slips and forms you’ll need? If not, start by contacting your employer (or previous employers) to obtain T4 slips and any other documents you or your accountant may require to complete and file your tax return.

If you’re not sure what you need, ask your accountant to make a list for you.

• The more your income sources are varied, the more you have in assets, and whether or not you have dependents are all elements that will affect the complexity of your tax return.

Remember that you’ll also need to get the correct forms for every year that you plan to file, if you haven't filed for more than one taxation year.  The forms are updated each year.

If you file late, you’ll owe interest and penalty fees only if you have an unpaid amount owed to either your provincial or the federal government.

However, if you've made sufficient contributions throughout the year but missed the April 30th due date, you can file your taxes just after and get your refund without receiving any penalties.

If you owe taxes
If you owe funds to either government, a penalty will be added to the amount owed in addition to interest for every month you’re late.

• Interest and penalties start May 1st, the day after your taxes are due every year.
• For outstanding amounts overdue for more than 12 months, the penalty percentage fee may increase depending on the year.

If you didn't get your return in on time, but the government needs to reimburse you for overpaying, you won’t have to pay interest or penalties.

• However, you should know that the government will never pay you any interest. What's more, if you don’t file on time you may not get your money back as soon as possible.

If you haven’t filed for a number of years and it comes to the government's attention, they will sometimes estimate what they believe your income has been and what amount is owed to them.

• Sometimes this amount is way off and sometimes they can estimate that you owe them when you don't. Only by filing on time can you help prevent this from happening to you.

Take control of your finances and make sure you get your taxes filed in on time. Don’t leave it to later as it risks becoming much more work, stress and a greater burden to handle down the road.