Should you file your taxes on time if you still owe tax from previous years?

Tax debt, especially for small business owners and the self-employed, can spiral out of control all too quickly. Not filing your tax returns, or filing late, only makes the problem worse.

If you fall behind on your tax payments, especially HST and employee deductions, for even a few months, the Canada Revenue Agency will add heavy interest charges to your balances, and will take aggressive action to collect on the balances. This action may include registration of liens against your personal property, garnishment of your bank account(s), and even third party demands to pay to your clientele. It’s hard to catch up on past tax debts when current remittances also become due. The problem gets even worse when you don’t file your tax returns on time. The Canada Revenue Agency will assess a late filing penalty for each late return, and the penalty gets higher for multiple late filings.

If you still owe tax from previous years, and you don’t think you can catch up and stay current with this year’s taxes, it’s time to seek professional assistance.

A consumer proposal or a personal bankruptcy permits you to settle with the Canada Revenue Agency for a fraction of your total assessments. In many cases this settlement will relieve all late filing penalties and interests, and much of the tax principal. This permits you to get caught up and approach your ongoing tax obligations with a clean slate.

As trustees in bankruptcy and administrators of consumer proposals, Goldhar can review your tax situation, advise you on strategies to shed the debt, and negotiate a settlement with the Taxman.

Bottom line: Nothing excuses you from filing your tax returns as and when due. You should always file. But if you can’t pay the tax, talk to Goldhar before the Canada Revenue Agency gets aggressive.

Call Goldhar at 1-855-541-5114 for a free personal and  confidential consultation.

With offices across southern Ontario, there’s a Goldhar shed the debt specialist close to you. Appointments may be arranged in a Goldhar office, or at a place of your choosing.