File Back Taxes in Canada

File the years that were skipped

You can still file after the due date. Kennedy Tax & Accounting Inc. prepares those previous personal returns for up to 10 years. Most individuals are due on or before April 30 of the next year. Self-employed people and their spouses file on or before June 15, but a balance owing is still due at the April date. A corporation files within six months after its year end. A trust files within 90 days after its year end. For a person who died, the due date is the later of six months after the death and the normal due date.

If you owe tax

Filing late is allowed. Owing tax on a late return is what brings the penalty: generally 5 percent of the unpaid tax plus 1 percent of that balance for each full month the return is late, up to 12 months. Interest on the balance is a separate charge. The firm does not describe that 1 percent as interest.

What to gather

Use the same slips as a current year: T4s and other income slips, receipts, and the last notice of assessment you do have. Self-employed years need bank statements and invoices. Several open years are quoted together, because the price is not the single-year personal starting price unless the year is a simple personal return at $49.99 + HST.

The only office is in Scarborough, near Kennedy Station. You can come in or send the papers. English, Bengali and Tamil are spoken. Manoranjan (Mano) Talukder, CPA, leads the firm, which has done this work since 2010. Personal income tax returns start at $49.99 + HST. Everything else is quoted before it starts.

A year that was filed and needs a correction is a T1 adjustment, not a new filing.

The original FAQ on a missed date

The firm’s FAQ said it is your responsibility to file by the due date. If you miss it, a benefit that depends on a filed return can stop. The examples it gave were a child’s benefit, the GST/HST credit and the Ontario Trillium Benefit. You can still file after the date. Kennedy Tax prepares previous personal returns for up to 10 years. That 10-year line is also on the personal tax service list, under multi-year returns.

If the year was never filed, and if tax is owing

Filing late is allowed. The penalty the FAQ described applies when you owe tax: generally 5 percent of the unpaid tax, plus 1 percent for each full month, to a maximum of 12 months. The current CRA page is the one to read for the precise rule, including a higher rate after a demand to file. Interest on the balance is a separate charge. The firm will not describe the 1 percent as interest. If you cannot pay, file anyway. The return and the payment are different steps.

What to gather for each open year

The FAQ’s document list is the one the office still uses, for each year that was skipped.

• T4, T4A, T4E, T4RSP, T5007, RC62, T3, T5 and any other income slip.
• A rent or property tax receipt.
• Donations, medical expenses, child care, RRSP contributions or a Home Buyers’ Plan withdrawal, and interest paid on a student loan.
• For a senior: T4A(P), T4(OAS), T4RSP, T4RIF, T4A, T3 and T5.
• For a student: the tuition slip, T2202, and any T4A.
• For rental income: the rent and the house costs.
• For self-employed work: bank statements, income records and expense invoices, plus vehicle papers if a car was used.
• The last notice of assessment or reassessment you do have.

Several open years are quoted together. The single-year starting price of $49.99 + HST applies only when that year is a simple personal return. A year that was filed and needs a correction is a T1 adjustment, not a second filing of the same year.

Corporations are a different deadline. A T2 is due six months after the year end. The FAQ said that if a corporation owes tax and does not pay, the CRA may freeze a bank account, garnish receivables, put a lien on property, or go to court. That is a reason to file the missing corporate years, and it is quoted as corporate work, not as a personal return.

English, Bengali and Tamil are spoken. The only office is 2390 Eglinton Ave E, Suite 205, Scarborough, near Kennedy Station. Manoranjan (Mano) Talukder, CPA, has led the firm since 2010.

After the missing years are in

Each year is prepared from the slips for that year, then e-filed. You keep the copy. When the notice of assessment arrives, compare it with that copy. A difference is a reason to call, not a reason to file the year a third time. Benefits that stopped because a return was missing are a CRA process. The firm’s role is to get the returns in. It does not promise a payment date or an amount.

If you are self-employed for some of the open years, those years need the bank statements and the invoices, and the June 15 filing date still leaves the April balance-due date in place for a year that owes tax. If one of the years was already filed, leave it off this list and use a T1 adjustment. The quote names how many years are in the package before work starts.