Outsourced CFO | Late Charges For Filing Taxes Late
There are many things that business owners need to remember when it comes to filing corporate and personal taxes outsourced CFO, but despite how many things the business owner has to remember, the one thing that they need to ensure that they don’t forget is when there filing deadline is, so that they don’t file late. Late filing means that business owners will be getting hit with massive penalties, that can negatively impact their business significantly.
The filing deadline for corporate taxes, is six months after their year end. So when ever there your hand is, they know that they should be filing their taxes before the end of the six months. Outsource CFO says that business owners will starts incurring interest charges at three months, however it’s 1%, so it is a minor amount. By filing late, the penalties for being late 1 year are 5% of the balance owing, and then 1% per month. Businesses that file multiple years late, should expect to get a 10% penalty of the balance owing +2% per month for every single year that they are late. These penalties are in addition to the interest that is outstanding on the balance, which is 6% per year.
The personal tax deadline is April 30 for everybody except business owners that own on unincorporated business. The deadline for proprietorships is June 15. Business owners should ensure that they are not late their personal taxes either says outsourced CFO, however if people do of taxes, filing late will not help them. However if they file on time, whether it’s corporate or personal taxes that they owe says outsource CFO, they will be able to work out a payment plan. They have a six-month payment option for people who do end up owing taxes. The only payment plan that is not six months, is if business owners owe GST. GST is payable immediately, if business owners are behind, CRA will only grant them three-month payment period. The reason for this is because Canada revenue agency the use nonpayment of GST is an abuse of a trust fund. The GST that a business owner collects from their customers, does not belong to them, it’s money that was collected on behalf of the government. They reason that since the money was collected already, the business owner should have that money. If they pay late, CRA is quite angry that they are using government dollars in order to fund the operation of their business. Most businesses should be able to set up their bank account so that 5% of all of the money that is deposited into the bank, whether it’s by check, cash, or through debit or interact, is set aside into a separate account, so that business owners can always know that they have that money set aside for when they pay GST. By implementing the strategy, business owners can avoid being late on paying GST, because they will always have that money available to them says outsourced CFO.
Business owners may choose to file their taxes late, because they are having cash flow problems, and they simply do not have the money available to pay their taxes says outsourced CFO. They think by filing late, they can increase their cash flow, so that when they do have increased cash flow, they can then file their taxes, and pay what they owe. Unfortunately even by filing their corporate taxes late, business owners can be hit with a penalty that may be hard to recover from. Even if they are unable to pay their taxes at the time of filing, they should file on time to avoid being hit with penalties.
Outsource CFO says that business owners can approach Canada revenue agency if they owe taxes, and come up with a payment plan, that payment plan may be all that’s needed for business owners to increase their cash flow. Having a payment to plan option can be very powerful for entrepreneurs to know about, and it can help them avoid making decisions like filing their taxes late.
Business owners should also know what’s delay charges are for filing their taxes late, the deterrent to doing so. If they are late filing their taxes in the first year, business owners will owe 5% of the balance owing, and 1% per month. This is in addition to the interest on the outstanding balance which is 6% per year. Outsourced CFO says if business owners are behind multiple years, the penalties are 10% of the balance owing per year and 2% per month. This can start to add up quite quickly, depending how much the business owes in taxes, and how many years they are late.
Business owners should avoid paying late because they’re not saving interest in their late filing, the interest starts from the day they start owing interest which is three months after their fiscal year end. They don’t start owing interest on the day that they file, so there is absolutely no reason that saves a business owner any money by filing late. However, by avoiding filing late says outsource CFO, business owners definitely will avoid penalties. Business owners should consider it saving themselves 5% just by filing on time, even if they don’t have the cash to pay their taxes.
There is hope for a business owner that avoided filing, in hopes of increasing their cash flow, but then realizing the error of their ways says outsourced CFO. It’s called voluntary disclosure, and if a business owner has not yet started getting letters or phone calls from CRA informing them that they are going to curb penalties for late filing, then a business owner can approach CRA, to admit to them that they haven’t filed their taxes yet, and asked CRA to not give them late penalty. Often, this approach works, and business owners can get penalties removed simply by admitting their error, and agreeing to pay the interest charges. Do not be worried about the pricing of our assistance too much. we will work with you to get you what you need.