Asked
I recently got an email from CRA, a Notice of Collection, for the taxes i just did in Spring. I am self employed and last year was the most i ever made, and I was not saving monthly for tax ... As a family, we were scraping by, so saving just was not an option after hubby lost job. My question is... what is the best way to arrange payments? Should I do the online form with CRA? call them? Will they lower the interest amount, knowing my situation? Will they allow me to start paying at a much later date? I will take care of it eventually, but, it will take time. It is just over $3k. I do not work in summer months, so have absolutely no income right now... we just had our mortgage renewed at an astronimical amount, which we already have no idea how we will pay next month... it went up another 900 a month... basically, we will not have a food budget...(not that we spend that on food, but these days... ) In the fall, my income will be back, so I was planning to arrange pymnts. With that said, even with my income back.. that, and my husband's income, are still not enough to cover essentials. We are striving to survive, and working hard to increase income, but as you all know, this is very difficult. Is there a better way, to pay this income tax bill? Can I negotiate a lower rate? we dont have available CC or LOC... they are maxed. this just sucks.
Clint’s answer
I'm very sorry to hear this, and it is truly a difficult situation. The CRA is going to be unrelenting in the short to mid term until the substantial debt that has been accumulated is relieved. Taxes are an inevitable part of life, however the percentage on the interest is getting to be substantial. There is a form that you can fill out and apply to have penalties and interest relief, however, the judgment on the hardships one might include in the application form are somewhat subjective, especially when the country is in a debt recovery position.
Atop of the application, one would likely have to expose all assets and accounts with income and expenses as they are also doing everything they can to gather information, and once they have it all, the judgment will be based on how the hardship is viewed.
The form is called an RC4288. Google it and download the fillable PDF form and mail it to the address indicated in the form. Alternatively, log in to your My Account and submit it electronically. (Electronic submissions are best by far)
Processing time is a while.
Hope this helps.
July 20, 2024
From Ask Clint: real questions from a Canadian public finance forum, answered by Clint Cole. Names are changed. This is general information, not advice for your situation, and rules and dollar figures may have changed since Clint answered. Terms