What are Back Taxes?
Back taxes are the monies owed after filing your tax return in Ottawa for a given year. This happens when information is either omitted or misrepresented about your earnings, for whatever reason, and the CRA found the discrepancy. Another explanation is you may have just forgotten or neglected to file for a given year.
This is not a habit to get into because of the possible interest and penalty charges that may occur. As an Ottawa Taxpayer you are responsible for making up short-paying or underpaying on your tax returns. This is what back taxes are and it is why it pays to ensure that all of your information is correct every tax period.
The Possible Penalties Assciated with Back Taxes
Generally speaking the CRA can only reassess your records within a three year window from the tax year in question. Only under certain circumstances are they allowed to do otherwise. One example is if an Ottawa Taxpayer has wilfully misrepresented their financial status by omitting information or by placing the wrong information on the return.
The actual penalty may be repaying the owed monies with interest, or you could face criminal charges. The interest charged would be compounded daily on the amount of tax owed for the given year. Interest calculated in this fashion can increase quickly as it begins on the date the discrepancy was reported.
What You Should Do
Accordingly, when and if you are ever confronted with this type of situation Ottawa Tax Preparation can help you. The best way to avoid this possibility is to have your taxes taken care of by a professional tax accountant. In a scenario where you suspect that you have made a mistake, it is advised to bring this to our attention so we can look further into how the return was calculated.
Your part in this process is to ensure all of your information is correct and accurate and bringing all of your receipts to us so we can make sure there are no mistakes. If we find a mistake we will re-file by taking advantage of the voluntary disclosure program. Once the CRA accepts the new information it may result in reduced penalties and interest payments on the amount of back tax due.
The advantage of coming to Ottawa Tax Preparation lies in our ability to provide top notch accounting services. We have over twenty years of experience in all facets of tax preparation and negotiation with the Canadian Revenue Agency. Let our professional certified tax accountants, help you help yourself by handling any unfulfilled tax requirements and in locating credits to maximize your returns.