Do You Owe The CRA?
Owing money to the Canada Revenue Agency can be overwhelming, especially when it feels like you're barely making it by as it is. There are several simple reasons that you could owe the government at the end of the year, but a few of the more common ones can consist of; withdrawing your RRSPs, self-employment income(including HST and source deductions) multiple jobs with inadequate withholdings, or first-time pensioner who did not have enough taxes taken off.
What Advantageous Can Do For You!
Set-up a payment plan with the CRA. The government is willing to work with you and keep the interest rates low as long as you are making an effort to maintain communication and payments.
Apply to have penalty fees and interest reduced. A majority of the time the amount owing is mostly penalties and interest. With proper counseling and guidance, you could be eligible for the program.
Review prior tax years. There might be something that was missed on a previous tax year that could reduce the amount owing, coincidingly the penalties as well as the interest.
Why Be Pro-Active
When a taxpayer results in owing money to the CRA, they then have several means of collecting the amount owed.
The CRA can issue a garnishment to intercept funds that a third party owes you or holds for you. A third party could include a person or organization such as your employer, your bank or other sources of income.
The CRA can get a writ or memorial and seize your assets and property. As an individual, this could include your car, boat, artwork, cottage, rental property, or personal residence.
If you are owed money by any federal government department or agency, the CRA can issue a statutory set-off and use these amounts to reduce your tax debt or other government programs debt.
The Income Tax Act states that the penalties for failing to file a tax return if you're required to do so can result in fines of anywhere between $1000 and $25000 and up to 1 year in prison.