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Read This FAQ Before Filing Your Ontario Income Taxes

Posted on Monday, February 24th, 2020 - 1,710 Reads

Before filing your taxes in any given year, you’ll want to be aware of your options and limitations. This document provides a clear guideline and answers the common questions that people who are ready to file their taxes are asking.

What Is the Due Date to File Taxes in Ontario?

Preparing personal income taxesAny individual who lives in Ontario is required to file their tax return by April 30. If you file and pay by this date, you won’t be required to make penalty payments. Self-employed individuals must file their tax returns by June 15. The same is true for their spouses.

However, the balance that you owe will still need to be paid by April 30. If you decide to make instalment payments throughout the year, these payments must be submitted in four instalments at March 15, June 15, September 15, and December 15.

Can Taxes Be Paid With a Credit Card?

If you’d like to pay your taxes with a credit card, the only way to do so is by using a third-party service provider that allows a credit card to be used for payment. This provider will send the payment that you make directly to the Canada Revenue Agency.

Keep in mind that the majority of third-party services providers will charge a small fee if you want to use their services.

Can Taxes Be Included in Bankruptcy?

If you file for bankruptcy in Ontario, it’s possible to include your taxes when you file. More than 50 percent of individuals who file for bankruptcy have at least some amount of tax debt. While the main form of tax that can be included with bankruptcy is personal income tax, you can also include source deductions, HST, and corporate tax debts.

The bankruptcy law in Ontario and throughout Canada doesn’t distinguish between debts that are owed on taxes and other types of unsecured debt.

There are, however, two restrictions to be aware of. For one, including taxes that you owe when filing for bankruptcy isn’t possible if you’ve been directly charged under General Anti-Avoidance Rules, which happens if you have created a scheme to avoid paying taxes.

Another restriction occurs if you personally transfer assets to another individual before filing your taxes, which could lead to a tax assessment being filed against you.

In all other situations, you should be able to have your tax debt discharged when filing for bankruptcy.

Can Taxes Be Garnished From Your Income?

If you don’t pay your taxes on time, the Canada Revenue Service can decide to issue a garnishment, which will intercept any funds that a third party is holding for you or owes you. It’s possible for this third party to be your employer.

The notice could also be issued to your bank, which means that taxes would be garnished even if you’re self-employed.

What Happens When You File Taxes Late?

If you file your taxes late, a late filing penalty will be applies, which is equivalent to five percent of the balance that you owe as well as an additional one percent for every month that you don’t make the payment. Daily interest will also start to accrue immediately after the April 30 deadline.

If you happen to owe around $5,000 on your taxes and don’t file for four months after the initial due date, your late filing penalty would be nine percent of what you owe, which is $450.

Can Taxes Be Filed for Free?

There are many ways that you can file your taxes for free if you live in Ontario, the primary of which involves using free tax software to file and pay your taxes. There are also free tax clinics in Ontario that can assist you with filling out and filing your taxes.

However, it’s much better to go with an accountant during this process. An experienced and reputable accountant will have extensive knowledge of tax law in Ontario, which can be useful when you’re trying to lower the amount of taxes that you owe.

Will I Be Put Into Collections If I Don’t Pay My Taxes?

If you don’t pay your taxes on time and haven’t talked with the CRA to make your payments in instalments, the CRA could take legal action against you, which only occurs at least 90 days after you received your first notice about owing taxes.

Eventually, liens may be placed on your assets or property by the CRA.

Can I File My Taxes Online?

While many individuals choose to file their taxes by phone or through the mail, it’s possible to file your taxes online, which makes for a more streamlined process.

To file your taxes online, you will need to use NETFILE certified software, which will transmit the information directly to the Canada Revenue Agency.

Where Can I Find the Ontario Tax Forms?

You can find the Ontario tax forms at this link, which takes you to the Canada Revenue Service website. Along with standard income tax returns, you will also find a wide range of schedules that can be filed along with the return for certain deductions or types of income. For instance, Schedule 9 is necessary to file if you have received donations and gifts during the previous tax year.

What Are the Tax Credits and Benefits?

There are many tax credits and benefits that are new for 2020. These benefits range all the way from an increase in federal and provincial income tax credits to an increase in contribution limits for the TFSA, which is a Tax-Free Savings Account.


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Lana Leigh McDole is the owner of LLM Business Solutions. She studied accountancy at CGA Ontario in Ottawa Ontario and graduated in 2012. Her passion is her work and providing her customers with the best service possible, at the best prices.

Email: [email protected] | Phone: 226-802-0541

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