Bob Gauvreau explains corporate tax deadlines and consequences of filing late. Key points: any balance owing must be paid within 90 days of the corporate year-end (example: March 31 → payment due June 30); the corporate tax return itself is due within 180 days (six months) of year-end (example: March 31 → filing due September 30). If a balance remains unpaid at the filing deadline, penalties apply: an initial 5% plus 1% for each additional month late. Late filing also raises an organization’s risk profile and increases the chance of an audit. The speaker recommends timely bookkeeping and working with professionals to avoid these outcomes.
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So a great question that we get asked often is what happens if we file our corporate taxes late? So the first part is, let's talk about the deadlines. So any balance owing is due within 90 days of your corporate year end date. So for example, let's say it's March 31st. March 31st is your year end date. June 30th is when the payment needs to be made with respect to those taxes. Now, at the same token, even though that's a 90 day window, we have 180 days or six months to file our corporate tax return from that year end date. So again, March 31st, our year end filing date is September 30th. Here's the situation. If you've paid your balance owing within 90 days and there's nothing owing, there's zero late filing penalty related to, you know, not getting your taxes filed by September 30th. If it's October 15th, no penalty. If you choose to not make the payment that's owed at that 90 day period and it's still owing at filing deadline, you would have a late filing penalty. And the Penalty is essentially 5% in the initial month plus 1% per month following. So every month you're late, you get hit with another penalty. As you can imagine, 5% on the overall balance owing could be a fairly substantial amount of money. So we want to avoid that altogether. The other part that I think is important to discuss is, is the fact that if we file late, our government agencies essentially have a risk profile rating. And if we're not filing on time, it enhances our risk profile rating, which ultimately could result in greater risk of being audited. So we want to always make sure that we're filing on time. It increases the risk. It also comes with penalties. With working with the right professionals, none of these should be an issue as long as you're keeping your bookkeeping up to date. So that is the risk of filing late and the outcomes related to late filing as well.
