What We Review — and What You Should Know — Before Filing Late Returns
If you’re behind on your tax returns, the first step is not preparing forms.
It is understanding exactly where you stand.
Most people fall behind because something changed — self-employment began, income fluctuated, life became busy, or one missed year quietly became several.
Before filing anything, we review the full position.
How CRA Calculates Penalties and Interest
When a return is late and there is tax owing, CRA generally applies:
• A late-filing penalty calculated as a percentage of the unpaid balance
• Additional monthly penalties if the delay continues
• Interest that compounds daily on unpaid tax and on penalties
The interest rate is set quarterly by CRA based on prescribed rates. It is not fixed and adjusts over time. If there is a balance owing, interest begins from the original filing deadline and continues until the amount is paid in full.
That is why delay increases the cost.
Why Multiple Late Years Need to Be Reviewed Together
When more than one year is involved, the filings connect.
Income in one year may affect benefit entitlements in another.
Prior notices of assessment may contain balances or carryforwards that need verification.
Instalment requirements may have been triggered in earlier years.
Before any late returns are filed, we assess the full position to ensure the filings are accurate and complete.
If You’re Behind, Start Here
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Confirm Which Years Are Outstanding
Log into your CRA account or obtain confirmation of what has and has not been filed.2. Gather All CRA Correspondence
Notices of assessment, statements of account, instalment reminders, and collection letters show CRA’s current view of your file.3. Assemble Complete Income and Expense Information
This includes employment slips, self-employment income, business records, expenses, and any other income sources. Filing incomplete information often leads to amendments later — and additional interest accumulating if there is a balance owing.To make this easier, we’ve prepared a checklist to help you organize the information needed to bring prior-year returns current.
Being behind is stressful — and procrastinating further only increases that stress, along with penalties and interest.
Give us a call to start the catch-up process and regain your peace of mind.
