Here's What To Do If You're Expecting To Owe Big-Bucks At Tax Time This Year
This time of year can be pretty stressful, especially if you’re expecting to owe money at tax time.
This tax season is set to be particularly complicated, thanks in part to the COVID-19 pandemic and related benefits, as well as new tax deductions for people working from home.
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To get some advice for Canadians worried about filing their tax return this year, Narcity spoke with Gerry Vittoratos, a national specialist at UFile.
When asked what advice he had for people who are expecting to owe the Canada Revenue Agency money, Vittoratos said, “First things first, make sure you file your tax return on time.”
“Even if you owe money, you don’t want to compound the problem by filing late and having the CRA charge you a penalty,” he explained.
He noted that tax debt “doesn’t vanish” if you don’t file your tax return, no matter how much you may want to ignore the issue.
“Once you have filed on time or even sooner, you can better assess your situation and plan to pay your debt,” he said.
From there, Canadians who owe money can organize payment arrangements with the CRA via their debt management department — which intends to make repayments more manageable.
In fact, Vittoratos says that waiting until the “last minute” to file your taxes is one of his biggest no-no’s when it comes to tax time.
“Whether you owe money to the CRA, or you are expecting a refund, it makes little sense to wait until the last minute to file your taxes,” he told Narcity.
“If you owe, you have very little wiggle room to pay your amount owing on time if you wait until the last minute. If you’re expecting a refund, why would you wait to get paid?”
It’s also worth noting that the government has implemented an interest-free year to return tax debt for some Canadians who received COVID-19 benefits this tax year.
This video explains exactly who is eligible, so it’s worth checking out if you think this could apply to you.