Introduction
Tax season is an important time for medical professionals in Canada, but with demanding schedules and busy practices, it’s easy to miss the deadline. For the 2024 tax year, the personal income tax filing deadline is April 30, 2025. If you or your spouse are self-employed, the deadline to file remains June 15, 2025, but any balance owing must still be paid by April 30, 2025, to avoid interest charges.
Missing the tax deadline can lead to penalties, interest charges, and other complications. Here’s what you need to know if you file your taxes late.
Consequences of Filing Late
If you owe taxes and miss the deadline, the Canada Revenue Agency (CRA) will apply:
- A Late-Filing Penalty: 5% of the balance owed, plus an additional 1% for each month your return is late, up to a maximum of 12 months.
- Interest on Outstanding Balance: Compound daily interest starts accruing immediately after April 30, 2025, on any unpaid balance. The interest rate fluctuates every three months.
- Higher Interest for Corporations: If you operate through a Medical Professional Corporation (MPC), corporate tax balances will be subject to an interest rate of around 8% or higher, depending on CRA updates.
What If You Can’t Pay Your Taxes on Time?
Even if you can’t afford to pay your full tax balance, it is always better to file your return on time to avoid additional penalties. The CRA offers payment plans for taxpayers facing financial difficulties, allowing you to pay in installments rather than in a lump sum.
Additionally, you may be eligible to request penalty and interest relief if you missed the deadline due to circumstances beyond your control, such as serious illness or unforeseen financial hardship. However, CRA will only consider these requests within a 10-year period.
Key Takeaways for Medical Professionals
- File on time, even if you can’t pay in full to avoid late-filing penalties.
- Medical Professional Corporations (MPCs) face higher interest rates on overdue tax balances.
- Consider setting up tax installment payments throughout the year to avoid large balances owing.
- Use available deductions and tax planning strategies to minimize your tax liability before the deadline.
Need Help with Tax Planning?
At Tax Partners, we specialize in tax planning for medical professionals, helping you stay compliant while maximizing deductions. If you’re concerned about missing the deadline, managing tax payments, or optimizing your financial strategy, our expert team is here to assist you.
Don’t wait until the last minute—get proactive with your taxes today. Contact Tax Partners to ensure a smooth and stress-free tax season.
This article is written for educational purposes.
Should you have any inquiries, please do not hesitate to contact us at (905) 836-8755, via email at [email protected], or by visiting our website at www.taxpartners.ca.
Tax Partners has been operational since 1981 and is recognized as one of the leading tax and accounting firms in North America. Contact us today for a FREE initial consultation appointment.