Two things in life are inevitable, one of which is the payment of taxes. While mandatory, some taxpayers are remiss in their obligations, either by negligence, incapacity, or deliberate avoidance.
Regardless of which criteria you fit, know that the Canada Revenue Agency (CRA) offers tax repayment options to help you cope with your missed tax payments.
Tax audit experts can help you manage your tax payables so you won’t miss the deadlines. They can also help you apply for tax relief to get back on your feet as soon as possible. Your accountant or tax expert may suggest the following options.
Paying Your Taxes in Full
One of the best and easiest tax payment options is fully settling your debts. If you have the money to pay immediately, do so by mail, in person, or online. If you can’t pay right away, settle it over time. The second option is more popular, especially for people with bankruptcy and other financial difficulties.
The good news is that the CRA is proactive in helping taxpayers find the best way to pay their tax debts. If you want to take advantage of this option, follow these four simple steps.
- Calculate both your monthly income and expenses.
- Find out how much you can afford to pay by factoring in the following:
- Debt amount
- Debt payment frequency
- Number of debt payments or amount per payment
- Call the CRA at 1-866-256-1147 and submit your payment plan.
- Start repaying based on your payment plan.
Settle the required initial payment and ensure you pay the CRA on the dates outlined in your payment plan. Also, it’s essential to file your tax returns by the deadline.
Discuss Other Possible Repayment Options With the CRA
Suppose you can’t pay your tax debts as soon as possible. In that case, the best option is to contact the CRA to develop other options. Most of the time, this discussion would revolve around the following:
- Deferring tax debt payments when you can already afford it
- Making or starting payment arrangement changes
- Discussing other debt settlement options
Other debt payment alternatives often suggest filing for bankruptcy or insolvency. This option is the best for most Canadians since it opens the door to a better financial future.
Filing for Bankruptcy or Insolvency
If you can’t pay off your debts, one of the best ways forward is to declare personal bankruptcy. This debt relief can help you clear your debts, giving you the fresh financial start you deserve. However, know that not everyone who applies for bankruptcy gets approved.
Here are the qualifications you must meet to take advantage of this remedy.
- The applicant must be a bonafide resident of Canada
- Applicants should be incapacitated to pay their bills when they’re due and demandable
- Their balance owing should be over $1,000
If you meet these specific requirements, you can file for bankruptcy. The CRA will be automatically notified of your application. The agency will then turn over any tax refunds to your Licensed Insolvency Trustee (LIT), and the money will be available for your creditors. Any income tax you owe will be cleared automatically by the bankruptcy.
Work With a Tax Expert To Handle Your Missed Taxes
Having various options for paying certain obligations offers great help to people, especially during trying times. You can check out the CRA website to learn more about the abovementioned plans. If you want to navigate your legal obligations, seek the help of a tax audit experts like Faris CPA. They can help make things easier for you.
Jason is the Marketing Manager at a local advertising company in Australia. He moved to Australia 10 years back for his passion for advertising. Jason recently joined BFA as a volunteer writer and contributes by sharing his valuable experience and knowledge.
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