Tax Deadline. What Happens if You Don’t File on Time?

ImportantJust a reminder that due to the Heartbleed Bug, the tax deadline has been extended to May 5th.

However if you aren’t able to file your taxes before then, what are the penalties?

*Late-filing penalty

If you owe tax for 2013 and do not file your return for 2013 on time, the CRA charges you a late-filing penalty. The penalty is 5% of your 2013 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.

If the CRA charges a late-filing penalty on your return for 2010, 2011, or 2012 your late-filing penalty for 2013 may be 10% of your 2013 balance owing, plus 2% of your 2013 balance owing for each full month your return is late, to a maximum of 20 months.

*Repeated failure to report income penalty

If you failed to report an amount on your return for 2013, and you also failed to report an amount on your return for 2010, 2011, or 2012, you may have to pay a federal and provincial/territorial repeated failure to report income penalty. The federal and provincial/territorial penalties are each 10% of the amount that you failed to report on your return for 2013.

*False statements or omissions penalty

You may have to pay a penalty if you, knowingly or under circumstances amounting to gross negligence, have made a false statement or omission on your 2013 return.

The penalty is equal to the greater of:
$100; and 50% of the understated tax and/or the overstated credits related to the false statement or omission.

*Information provided from the CRA

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Making the Right Choice When Getting Your Taxes Done

So it’s close to the tax deadline, and you don’t feel up to doing them yourself. It’s a common enough scenario. After all, tax rules change every year, as do the forms, and they read like a cross between a legal brief and a thesis on rocket science.

So you decide to get an expert to do your taxes. But how do you pick? There are a plethora of options out there. From individual tax preparers, to tax preparation companies, to tax accountants. How do you know what the best option is for you? (more…)

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The Deadline Cometh… Honest!

We’ve written blog posts before on the tax deadline and how to deal with it, but the major item in the news of late is this new Heartbleed bug and the fact that CRA shut down all their electronic services as a precautionary measure against it. We know what you’re thinking. First, exactly what is this thing and how vulnerable am I, and secondly, it’s practically the end of April and I have to file my taxes, what the heck am I supposed to do?

To begin with, the Heartbleed Bug is a serious vulnerability in the popular OpenSSL cryptographic software library. This weakness allows stealing the information protected, under normal conditions, by the SSL/TLS encryption used to secure the Internet. SSL/TLS provides communication security and privacy over the Internet for applications such as web, email, instant messaging (IM) and some virtual private networks (VPNs).

The Heartbleed bug allows anyone on the Internet to read the memory of the systems protected by the vulnerable versions of the OpenSSL software. This compromises the secret keys used to identify the service providers and to encrypt the traffic, the names and passwords of the users and the actual content. This allows attackers to eavesdrop on communications, steal data directly from the services and users and to impersonate services and users.

Death © 2014 20th Century Fox Film Corp.

Not intended to imply any endorsement by 20th Century Fox Film Corp.

So this bug has actually been around for about two years, and it’s potentially a huge problem since attacks leave no traces. While many sites were not in fact vulnerable to the attack (especially those not using OpenSSL) several major sites were including Google, so Gmail users out there should definitely change your passwords…

Incidentally, TaxTron and Softron’s websites were not vulnerable to the bug. As well, none of your credit card information is stored by our websites.

The good news is that CRA has brought their systems back up and electronic services have resumed. Taxpayers and the CRA have certainty on the filing of returns through a confirmation code that is issued only upon successful transmission. If you did receive a code, your return was successfully filed. You can also check the status of your return on My Account.

For the individual filers out there, the situation has changed somewhat. While the tax deadline hasn’t actually changed, the Minister of National Revenue has announced that interest and penalties will not be applied to individual taxpayers filing their 2013 tax returns after April 30, 2014 for a period equal to the length of this service interruption. This means individual tax returns for 2013 filed by May 5, 2014 will not incur interest or penalties.

For more information and to check your favourite sites for vulnerability to the Heartbleed bug, check out https://lastpass.com/heartbleed/

The Deadline Cometh…

There’s an old saying that the only things we can’t avoid are death and taxes, both pretty unpleasant subjects. Now we’re approaching the tax deadline of April 30th, a scary time for a lot of people. (more…)

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When You Make a Mistake – Adjusting Your Return

We’ve all tried to avoid it at some time or another; you do something you realize you shouldn’t after it’s too late to take it back, or worse still, realize only a split second later to find you’re out of luck.

Whether it’s that sinking feeling as the car door closes with the keys still inside, or the terrible sensation of remembering that investment from a T5 you forgot to include, it’s at times like that when you sorely need the proverbial eraser that goes with the pencil.

Thankfully, when it comes to doing your taxes at least there are a couple of options available for you to make corrections to a return you’ve filed. One note though, you’ve got a window only ten years wide. If you remember in 2013 about an error you made in 2002, you won’t be able to adjust your return, although other options may be available for those extremely rare occasions.

The Tried And True Easy Way

You can send both of these together by mail to your appropriate tax centre:

  • a completed Form T1-ADJ, T1 Adjustment Request, or a signed letter providing the details of your request (including the years of the returns you want CRA to change), your social insurance number, your address, and a telephone number where CRA can reach you during the day; and
  • supporting documents for the changes you want to make and, if you have not sent them to CRA before, supporting documents for your original claim.

Generally, CRA will process adjustments submitted by mail within eight weeks, although this can vary depending on circumstances.

The Newfangled Easier Way – No, really!

You can log on to this new thing called the Internet (I hear they have it on computers now…):

CRA’s My Account service allows you to view or change your return as well as various other items related to your presence within CRA. If you have not registered for the service you can do so here.

To access CRA’s electronic service, log on to My Account and select the Change my return option. Enter and submit any changes to your most recent return, or to your returns of the previous two years.

Generally, CRA processes electronically filed adjustments within two weeks, although this too can vary depending on circumstances.

Learn more about CRA’s My Account service here.

If you’re not comfortable doing it yourself, one of our tax consultants at Softron will be able to get your Adjustment form filed quickly and correctly. Check out our Softron locations here.

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