Debt Management

Do you have to file taxes in Canada every year?

The majority of Canadians must file taxes every year, regardless of whether they owe taxes. If you live in Canada, you must file a tax return with the Canada Revenue Agency (CRA) by April 30 each year, although self-employed individuals have until June 15.

These requirements apply to all Canadian residents as well as international students, seasonal workers, Indigenous people, and non-residents with Canadian income.

Learn more about filing your taxes in Canada and the financial implications if you fail to do so each year.

Can you skip filing taxes in Canada for a year?

The only time you can stop collecting tax is when you owe no tax and receive no benefits. If you owe tax or want to claim any credits or benefits, you must file your tax every year. Neglecting to file can be classified as tax evasion, which can have significant legal and financial consequences.

Even if you don’t owe taxes, failure to file can disqualify you from receiving certain benefits, such as the Canada Child Benefit (CCB) or the Guaranteed Income Supplement (GIS).

How often do you have to file taxes in Canada?

If you or your spouse are self-employed, tax must be filed by April 30 or June 15 each year. However, all taxpayers must submit the payment by April 30 to avoid penalties or fines. If you have a business, you can file your tax return by June 15 but must pay your tax debt by April 30.

What if you don’t file your taxes in Canada?

At the very least, failing to file your taxes prevents you from taking advantage of benefits like the GST/HST credit or CCB. However, if you owe taxes, failure to file can result in significant legal and financial penalties.

As Yank Lime.Learning program on lead and tax specialist H&R Block Noted on Moolala: Money made simple The podcast“The reality is, there are tremendous, very serious consequences for not reporting your income, which of course can result in penalties, interest on what you owe… it can even lead to criminal charges.”


Along with substantial interest applied to unpaid balances, failure to file your tax return brings another consequence: penalties. And the punishments are severe! If you fail to file your 2023 return by April 30, 2024, whatever you owe is subject to a 5% late filing penalty of 1% for every full month of unpaid tax up to 12 months. A fine will be charged. So if, for example, you don’t file your 2023 return by April 2025, you’ll face a 17% penalty on any outstanding amount plus interest at the fixed rate.

And if you’re a chronic late filer, the penalties add up considerably. For example, if you incurred late filing penalties in any of the previous three tax years, a penalty of 10% plus 2% per month (up to 20 months) may be applied to your 2023 return. If it is also filed late. So, if you incur late filing penalties in 2022 and decide not to file your 2023 return again this year, by the time you file in April 2025, your penalty could be as high as 34%!

Of course, if you don’t have an outstanding balance, you don’t get penalized/interested.

Is there a late tax filing penalty if you don’t owe anything?

If you don’t owe taxes, you can file after the deadline without penalty. However, if you expect a refund, the CRA will not release your refund until you file your return. Additionally, you may see a delay in the calculation of any benefits or credits.

What are the benefits of filing taxes?

In addition to meeting legal requirements, filing your taxes has many benefits, including:

  • Possible tax refund
  • Access to tax benefits and credit
  • Eligibility for certain government programs
  • Eligibility for education benefits, including the Canada Learning Bond

Tax filing can also benefit people with debt or poor credit scores. Mike BergeronCounselor Manager, highlighted the impact of filing taxes on debt management and credit scores, explaining, “The benefits of filing taxes every year are for those with no taxable income, primarily those (HST/GST, Trillium, Child Tax and OAS/GIS) By not filing, it will reduce your monthly income and make debt repayment more difficult. Therefore, it can affect the credit score.”

Tax filing can help individuals access additional funds that can be used to pay off debt, which in turn can help improve credit scores. “Filing your taxes is not directly related to credit score, but has an indirect effect on the monthly income used to manage debt,” Bergeron explains.

Plus, you can take advantage of free tax help provided by the CRA when you file on time.

As Jeff LoomisExecutive Director of speedshared by us. Moolala: Money Made Simple Podcast“Tax collection is very important to many Canadians, and it’s even more important when people are living on low incomes so that people can access benefits that really help them make ends meet. Can help. A really concrete example is the Alberta and Canada child benefit and the GST exemption. These are really well-known benefits that you can get in Canada only if you file your taxes.

What can happen if you don’t pay your taxes?

Not paying your taxes is considered a criminal offense in Canada, as it is a form of tax evasion. In addition, failure to pay your taxes may result in interruption of benefits or lack of access to tax credits. You will also have to pay back the tax on your next tax return.

Is it not a crime to pay taxes in Canada?

If you fail to pay the taxes you owe, you may be found guilty of tax evasion, which is a serious crime in Canada. Possible penalties include fines of $1,000 to $25,000 and up to one year in prison.

Obstruction of benefits

If you’re receiving Canada Child Benefit or Old Age Security benefits, it’s especially important to file your return on time. Your eligibility for each of these benefits is updated each July and is determined by the numbers on your tax return. The amount of your benefits is also tied to your income reported on your return, so if you fail to file your tax return by the April 30 deadline, you risk having your benefits delayed.

Eligibility for the GST/HST quarterly credit, as well as various other province benefits, is determined by the numbers on your tax return, so it’s important to get it in time to take advantage of these credits.

Income record

Beyond the direct financial impact, not having a current tax return can affect other aspects of your life. The numbers on the return you submit are used for many other purposes, such as determining:

  • All types of loans, including student loans, mortgages, and business letters of credit
  • Student grants as well as certain bursaries and scholarships
  • Low-income grants for programs like home repairs and heating rebates

As you can see, failing to file your tax return on time can have many negative consequences. Even if you can’t pay your balance in full by April 30th, file anyway, you’ll save yourself money and hassle in the long run!

With easy-to-use tax preparation software Turbo Taxpreparing and filing your return is quick and takes the work out of paying your taxes correctly.

Get help with tax debt.

Filing and paying your taxes on time will keep you out of legal trouble and allow you to maintain your eligibility for tax credits and benefits. Struggling with tax debt? Sign up for our newsletter for expert tips.

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