Does the CRA Really Say You Can Pay Later?
One of the problems that a lot of people run into is not filing their taxes on time because they know they are going to owe money to the Canada tax department. Some simply do not have the extra cash at the tax deadline, so they just don’t file. The CRA doesn’t recommend this and they really do say you can pay later, but not in the way that you may be thinking.
Although not too many people are fond of the CRA, in many cases you can work with them concerning your tax issue. They do have to put up with a lot of rudeness and animosity when dealing with some of the public.
It really is important to have the right attitude with this government body and work towards getting your tax matters settled. A good Toronto accountant can help you with this.
By not filing your tax return because you owe them money, it appears as though you are trying to avoid filing. The CRA has no knowledge of your personal circumstance in regards to not being able to pay the amount due at the moment. So what ends up happening is penalties and interest begin to accumulate.
The file now pay later is done through PAD, which simply stands for pre-authorized debit. So what you do is set up your tax account online, then arrange for pre-authorized payments to be automatically withdrawn from your bank account. Basically what the CRA is saying about file now pay later, is that you can send your tax return in now and then just authorize them through the pre-authorized debit to take out the money by the tax filing due date.
Now that doesn’t mean you are automatically going to be exempt from interest or penalties, just because you are setting up pre-authorized banking. You will need to make formal payment arrangements with the CRA concerning the amount you owe. By law, if you owe money when you are filing your taxes then you are supposed to remit the amount owing with your tax return.
As you may have noticed the Canada tax department is really encouraging the tax payer to go paperless. They want to see everything done online, including payments. This concept is just another push in that direction.
Don’t forget that we are ready, willing and able to assist you with your tax returns here at Toronto Accountant. Better to get them sent in early so they are done and over with.