April 30th is the deadline for the vast majority of Canadians to file their tax returns and pay any taxes which they owe from the previous year through their tax accountant in Toronto. If you are self-employed you can extend this deadline until June 15th, but you still have to have all your payments in by the 30th of April.
Many individuals wonder whether paying taxes is important or not, and those who make the unwise decision to not pay their taxes and go under the radar learn from their mistake that they will eventually need to get back in the system.
There are many cases where good taxpayers suddenly decide they don’t want to pay taxes anymore and they suddenly disappear when it comes to filing. These people generally take up another job in which they get direct cash and that is why it becomes very difficult for the CRA to track them down and to lay penalties on them.
The problem with this scenario is that things generally begin to collect and when this person decides they want to get back into the system again because they have found a better job then it can be very difficult for them to get back into the system without having to pay multiple fines.
There are two major disadvantages of not paying your taxes.
The first thing that happens when you get caught for not paying your taxes is that you are fined. The fine you have to pay is 5% of the amount which you owe, with an additional 1% of what you owe every month it was late for up to one year (12 months).
However, if in the last three years you have been charged for not paying taxes then the fine cranks up to 10% of your owed balance plus 2% of what you owe for every month it is late for a maximum of 20 months.
Does this sound confusing? Let’s break it down.
If you went through a divorce or lost your job and then you decided you would stop paying a visit to your tax accountant in Toronto as a sort of revenge story, then you would probably get away with paying taxes for a year.
However, say you found your dream job again after 1 year and needed to go back on payroll. In this case, you would have to resurface from the underground and integrate yourself as part of the CRA system again. The only problem is you have a year of unpaid taxes left to give in. Not only that, but you have to pay the penalty as well.
Say you owed $2000 in taxes each year. you would first pay this off.
Now the penalty you owe is 5% of $2000, which is $100. In addition to this $100, you will pay 1% of what you owe every month it is late up to 12 months. Assuming that it is passed April 30th, it would be $20 x 12= $240. So the total you owe would be the $2000 in taxes plus ($100+$240=$340) $340, which equals to a grand total of $2340.
If you were a repeat offender these numbers would go up by double.
Now some people won’t owe taxes at the end of the year. These individuals won’t have to suffer any penalties but they will still suffer in another way. Individuals who do not file their taxes, do not get benefits from the government. Child benefits and your GST return can easily be withheld until you cough up your next tax return.
When you decide that you no longer want to pay taxes you will have a hard time doing so when you are on payroll and working as an employee. Individuals who evade the CRA for years may get away with it for a little while, but in the end, they are always caught, and paying the penalties has large financial and social implications.
No one would really want to befriend- let alone marry- an individual who is constantly cheating the government and who can’t get a proper job due to their fear of being caught red-handed for cheating on their taxes for years.
So the moral of the story is pay your taxes, it really is in your best interest. If you’re too busy to go to an accountant you can always try online accounting firms. These firms are a great alternative to actually going in and visiting a firm yourself because you can save both time and money but get the same quality of work.