It’s tax time again! Many people dread this time of year, especially if they think they will owe. Even worse if you are already struggling with other debt.
Here are some important tips:
1. Penalties – File your return on time. If you file late and you owe money, you will be charged penalties, making it even harder to find the money for your CRA payment.
2. Government benefits – filing your return will ensure that benefits calculated based on your income will continue. These include Child Tax Benefits and Guaranteed Income Supplements for seniors. CRA may keep GST/HST credits and monthly Trillium benefits if you owe them money, but they won’t usually take benefits intended for children and seniors. Don’t use your credit cards to live on and dig yourself deeper in debt when you are entitle to government benefits.
3. Make a payment arrangement – if you owe and you can’t pay in full when you file, consider whether you can make a payment arrangement on your own. As a rule of thumb, divide your debt in 12 and if you can make that monthly payment and have the balance paid off within one year, you can probably come to an arrangement with CRA.
4. Call Vine and Williams – the only way to negotiate a reduction in the taxes owing is to file a proposal through a Licensed Insolvency Trustee like Vine and Williams. An accountant or tax lawyer might be able to help you with a reduction in interest or penalties, but if you can’t pay the tax or you don’t have a good reason why you didn’t file or pay, you need us!
You aren’t alone! We often see people who haven’t filed tax returns in years. Eventually if you don’t file returns, CRA will decide how much you owe and start chasing you for your CRA payment. This is called an arbitrary assessment.
CRA has increased its budget for tax compliance and collections … working to chase down people who don’t file returns or don’t pay. Don’t wait until they find you or worse until they start seizing your assets, freezing bank accounts, contacting your customers, garnishing your pay and putting a lien on your house.
Call Vine and Williams today at 310-6398 for a free consultation … we’re here to help with your tax and other debt!