filing a tax return in Canada

How to File Previous Years’ Tax Returns in Canada

We all know how crucial yet exhausting it is to file taxes each year on time. No one wants to do it!

There are so many excuses as to why a person wouldn’t want to file those taxes. Let’s all agree that the longer we procrastinate, the more money we might end up paying.

We’ve gathered up the most asked questions that might cross most people’s minds and their answers. You’ll find out how many years back can you file your taxes.

You haven’t filed your taxes for ten years? No problem, we’ll tell you what to do. How about getting your previous year’s tax return? We also got that covered and more.

Filing previous years’ tax returns in Canada has never been more straightforward.

How Many Years Back Can You File Taxes?

One thing to always remember is that this is a problem that’ll never go away. Just because the CRA (Canada Revenue Agency) didn’t contact you yet, that doesn’t mean that they have forgotten. They’ll reach out, sooner or later!

Keep in mind though, that there’s a high chance that by the time they contact you, you may owe them more money than you would’ve thought.

What Happens When I Miss the Deadline?

The maximum number of years to go back to is ten years.

The deadline for filing taxes in Canada is April 30th. As soon as you miss the deadline, there’s a 5% penalty that gets added. There’s also a 1% penalty that’s added for each additional month you’re late.

What If I Haven’t Filed Taxes for 10 Years?

Besides the fact that you now owe a ton of money, there are a few plans that can help you narrow down the amount a bit.

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What Can I Do to Fix This Issue?

The good news is that if the CRA hasn’t contacted you yet, you might be eligible for the Voluntary Disclosure Program. There are a couple of reasons why a person might qualify for this program.

For example, if you have a death in your family, you’re in financial distress or suffer from a severe illness, your chances of being accepted are high. You’d need to show evidence for sure!

Keep in mind that the CRA will never waive the fees to less than what’s originally owed. But they might see about waiving some penalty numbers to lessen the amount.

You may also qualify for a payment plan option. You’ll be asked a lot of questions so they can get the full picture though. Based on your answers, they’ll tell you whether you’re approved or not and how much your instalments will be.

I Filed My Taxes but Didn’t Pay, Now What?

In this situation, there’s an interest that gets added daily. Once you miss one deadline, the amount gets added up quickly!

How Many Previous Years Tax Returns Can I File?

There’s a general rule of filing tax returns. Records should be kept for at least six years, according to the CRA. It’s considered a crime to get rid of them beforehand. If you have a receipt that’s dated on January 13th, 2016, for example, you can’t get rid of it until December 31st, 2022.

You can request to get rid of your files before six years. You should have signed documents from the CRA approving of that though.

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The reason that the documents should be filed for so long is that sometimes you might be selected for a review.

Some businesses keep their documents for seven years. That’s to keep things on the safe side and avoid any penalties or punishments from getting rid of them too early.

How Do I Get Previous Years Tax Returns?

It’s simple to do so if you’re up to date with your taxes. But chances are, you’re not. There are a couple of solutions you could give a try to attain previous years’ tax returns.

Contacting CRA Agents

Whenever your employer issues a tax slip, there’s a copy that gets sent to the CRA. You can request it online or call the CRA.

Upon calling the CRA, you must have your Social Insurance Number on hand. Also, be prepared to answer the questions asked so they’d be able to identify you.

Sometimes the CRA agent might ask you questions in regards to previous tax returns. And if you haven’t filed them, you have just raised a flag with the CRA. Try to somehow get the CRA officer to identify you with other information.

Using 3rd Party Services

Some companies offer to do the call for you. They can try to obtain previous years’ tax returns. Again, this might alert the CRA of your current situation.

Filing One Year

If everything fails, or you want to try to play it as safe as possible. Simply file tax returns for one year. This gets rid of the problem that we had earlier.

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Something to Keep in Mind

If you miss any of your T-slips there’s a possibility that you might be penalized 20% by the CRA. That’s applied even if the CRA has a copy of it on record.

In a Nutshell

It’s important to remember to file your taxes on time to avoid unwanted penalties. If you can’t file your taxes due to serious issues, inform the CRA. There are a ton of helpful options they offer for those that can’t pay.

It’s better to come forward first before they contact you. That way, you can qualify for the Voluntary Disclosure Programs.

If you want to get rid of any of your documents, a rule of thumb is to ask first! You wouldn’t want to get rid of something that could get you in any trouble.

And if you’re way behind, it’s always better to start somewhere rather than nowhere at all!