Why You Should Hire an Accountant for Filing Back Taxes

Have you missed a year or two of filing taxes? We can help you with that. Get caught up and rectify any penalties or amounts owing by hiring an accountant this tax season.

Back taxes are taxes owed from a previous reporting period. If you owe taxes to the CRA and don’t pay them, you now have back taxes. As a taxpayer, you are completely liable for any underpayment of taxes regardless if it occurred intentionally or by accident.

Why do you need to file back taxes?

In Canada, it is illegal to not file your taxes. If you fail to file your taxes or file incorrectly, you may be faced with penalties, interest and other fees that will continue to add up the longer you go without filing your taxes.

You may also be convicted of tax evasion if you fail to file your taxes for a prolonged period of time. If you are convicted of tax evasion, it can lead to court-imposed fines, jail time, and a criminal record. In this case, you must repay the full amount of taxes owing, plus interest and any civil penalties assessed by the Canada Revenue Agency (CRA).

Not filing your taxes sets you back, however, you can rectify the situation. You can back file your taxes for up to 10 years in Canada. Whether you're behind one year or five, you should prioritize filing back taxes to avoid serious penalties.

If you filed your taxes but incorrectly reported your income, you are still responsible for the taxes on the balance of the unreported income and overdue tax returns.

Filing multiple year tax returns in Canada

Many people dread tax season. Maybe you find the process confusing or you simply don’t have the time and patience to file your taxes. That’s OK. Dedicated tax professionals are here to help you.

Hiring a tax accountant is beneficial if you’re behind on filing taxes, as it can be a complicated process depending on how many years you need to catch up on. The CRA has a process and helpful resources for filing past tax returns that you should follow if you’re behind.

The Voluntary Disclosure Program (VDP) was created for people who did not file taxes accurately or when they should have. If your application is accepted to the VDP, the CRA could grant you relief from prosecution and even reduce the interest or eliminate the penalties that you will be required to pay.

Your application for the VDP must be voluntary, meaning you must come forward before the CRA contacts you about your late taxes. You must also include the full payment of the tax debt owing, including any interest not waived by the VDP.

A professional tax accountant can help you navigate through the VDP and can help you negotiate a stress-free settlement with the CRA.

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Our expert team at Onyx Accounting can help you back file your taxes. Whether you have one year or five years we need to file, we'll ensure everything is accurate and you get all the returns you're entitled to.