Being late on taxes is the last thing business should want. Because in this case, one problem leads to another.
There are evident reasons your business should try to avoid being late on taxes. These include interlinked issues like late filing penalties, interests, reputational damage, drop in credit rating among other eventualities.
However, if such a situation arises and your business is late on taxes, you should not wait even for a day and should prepare to get back on track.
Following are some of the steps that you need to take to come clean of the tax delay.
You must first of all take a deep dive into the finances of your business as this will show you the way to get out from unfiled taxes. Below are what you may need to file your business tax return late:
Here is a list of documents you might need for filing your business taxes late:
You should analyze your records and estimate your taxes and penalties. For this purpose, you need to be aware of the CRA rules and regulations.
Moreover, you should factor in the amount of delay in filing of taxes.
The CRA imposes penalties and interest on the tax due for late filing business.
Assessing your position first is mandatory to be in a better position to negotiate with the Agency.
Here is a simple method to ascertain the penalties:
A taxation specialist can ensure that you pay a minimum amount of fees and avail all the refunds you deserve as per the latest regulations. He will also assist you in structuring the papers and make tax filing faster.
You need to file all overdue returns, beginning with the oldest year in which you have a return that has not been filed
Filing the earlier returns first may enable you to receive some benefits by carrying forward the sum of the liabilities to the latest returns and entitle you to some waivers.
The response time of the Canadian Revenue Agency in this regard is 180 days; however, it can take up to 8 months.
To make it easy for you to pay the taxes that have been due, the Canadian Revenue Agency may provide a payment plan, according to which you will not have to pay all the taxes in a lump sum.
Instead, the CRA can divide it into installments, which you must pay overtime. So, negotiate with the Agency and find the most favorable plan.
Or, you can also book a call with CRA. A volunteer or a CRA Agent will visit you and guide you on your tax matters. Remember that this visit is going to be confidential and he will be a helping hand standing there for your sake.
When your taxes are filed, take the steps needed to organize you business structure and finances so you will never have a late filing again.
Bear in mind that you are not alone when it comes to late taxes. Now and then, businesses find themselves in this situation. Notwithstanding that it is a discomforting and avoidable situation, you should not sit on it once it is there.
Instead, it would help if you tried to overcome it as soon as possible. It would help if you also realized that not filing at all is the worst thing you can do to your business, as it aggravates the problems. If you have incomplete or late filing, you can get back on track soon.
Though the process of filing late and on time is the same, the price is different. So, it’s always preferable to attempt to be on time. If ever there is a delay, one should act quickly and get the business to come clean.