Tax season can be stressful, especially if your finances are tight and you expect to owe money to the Canada Revenue Agency (CRA). But here’s the good news: you should still file your 2024 business income tax return on time, even if you can’t pay right away. Ignoring your tax return can make things a lot worse, including piling on extra penalties and interest. Here’s what you need to know and how you can protect yourself financially, even if you’re short on cash.
The deadline to file your 2024 Canadian income tax return is April 30, 2025. If you’re self-employed, you have until June 15, 2025, but any taxes you owe are still due by April 30.
If you owe money and don’t file by the deadline, the CRA will charge a late-filing penalty: 5% of your balance owing, plus an additional 1% for each full month your return is late, up to 12 months. On top of that, compound daily interest will be charged on any unpaid taxes.
Even if you can’t pay what you owe right away, file your return by the deadline to avoid these costly late-filing penalties.
The CRA understands that some people face financial hardship and offers payment arrangement options if you need more time to pay.
You can contact the CRA to set up a payment plan that works with your budget. The CRA will work with you to determine regular payments that you can afford. You can use their My Account service online or call their debt management division directly to discuss options. You must respect any payment arrangement that you make with the CRA. If your circumstances change, contact them before you miss any payment.
If your financial hardship is the result of circumstances beyond your control—like illness, job loss, or a natural disaster—you can apply for Taxpayer Relief. This allows the CRA to waive or cancel penalties and interest in certain situations. You’ll need to submit a formal request and provide supporting documentation.
Filing your return isn’t just about taxes. Many government benefits and credits—such as the GST/HST credit, Canada Child Benefit (CCB), and provincial tax credits—are based on your annual tax return. If you don’t file your small business tax, the CRA may withhold monthly support payments that could help you manage your financial situation.
Even if you owe and can’t pay, don’t delay filing.
Any amount you pay reduces the interest charged.
Set up a payment plan and avoid collection actions.
You may qualify for interest or penalty relief.
It’s understandable to feel overwhelmed if you owe money to the CRA, but ignoring your tax return will only make things harder. Filing your taxes on time is the smartest move—even if your wallet isn’t ready. It keeps penalties down, preserves your benefits, and opens the door to manageable solutions. When it comes to taxes, don’t wait or try to hide from the CRA – keep up to date. For more information, please contact your nearest Padgett representative.
