Every individual resident in Canada or every person who earns income while working in Canada is required to file a Canadian personal tax return.
All types of income must be reported, including tips, bonuses, employment income, investment income, rental income, and any other income you earn.
CRA Tax Filing Deadlines
Personal taxes are due to be paid by April 30 of the year following the year in which the income was earned.
Generally, personal tax returns are due to be filed by April 30 unless you have earned business income, or self-employment income, in which case the deadline is extended until June 15. However, the taxes remain payable on April 30.
CRA Penalties & Interest
CRA Instalment Penalties
If your instalment payments are late or less than the required amount, and your instalment interest charges are more than $1,000, you will have to pay an instalment penalty. The penalty is half of your actual instalment interest less the higher of:
- $1,000, or
- 25% of the amount of interest you would have been charged if you didn’t make instalment payments.
CRA Late Filing Penalty
If you have a balance owing and file your return late, there is a penalty of five per cent of the balance owing, plus an additional one per cent per month late, up to a maximum of 12 months.
These penalties increase to 10 per cent, two per cent, and 20 months respectively if you also filed late in any of the three previous years.
Failure To Report Income
You may also have to pay a federal and provincial/territorial penalty if you failed to report income of $500 or more for the latest year and any of the three previous years. See repeated failure to report income penalty.
If you voluntarily report these failures to the CRA, the penalties may be waived under the Voluntary Disclosures Program.
Daily compound interest will be charged on any balance unpaid on the day after the due date. Interest will also be charged on any penalties assessed. See prescribed interest rates.