If You Can’t Pay Your Tax Bill
Filing your income tax return is an important part of strategic financial management. Make this yearly chore work to your advantage with good planning.
The personal income tax deadline is April 30th. If you’re self employed, it’s June 15th; but your tax bill must be paid by April 30th (to avoid penalties).
So, what about the taxes you owe? If you can’t pay your bill, ask your Financial Advisor for help developing a budget centered on a repayment strategy. Then contact the Canada Revenue Agency (CRA) and negotiate.
CRA has indicated willingness to work with taxpayers who were impacted by the economic challenges last year. Including Covid-related benefits which arrived without enough tax deducted at the source.
The agency has a taxpayer relief provision. It gives CRA discretion to waive penalties or interest through circumstances beyond your control, for up to 10 years into the past. To request financial accommodation, complete form RC4288: Cancel or Waive Penalties or Interest.
Co-operating about the debt you owe, and negotiating a repayment plan, is far better than ignoring the situation. Because it won’t go away. This powerful agency has extensive collections machinery to use against you. Avoid this with a reasonable approach.
Strategic tax planning and reporting are key components in building your wealth. Your Financial Advisor can show you how to maximize your wealth and minimize your taxes.