Your Path to Debt Freedom
CRA and Tax Debt Solutions
Tax debt is very common in Canada. In the worst situations, years of improper filings can end in huge back-tax bills that can seem impossible to manage. While this is a serious problem, there are tax debt solutions!
Our Licensed Insolvency Trustees can offer you advice on your Canada Revenue Agency (CRA) arrears and tax debt, and provide real solutions to help you deal with CRA.
Causes of CRA Tax Debt
One of the most common reasons for tax debt is improper filing by self-employed individuals. Individuals who run their own businesses or do contract work need to account for all proper deductions and remittances to the CRA including; HST, personal income tax, and source deductions. Improperly claimed tax deductions or simply not making your annual or quarterly remittances can lead to significant penalties and arrears.
Your income tax bill is based on your total yearly income from work and cashed out RRSPs. If you have multiple part-time jobs or overlapping contracts, then you will need to make sure each company is properly deducting the appropriate taxable amount depending on your yearly income. Cashing out RRSPs also counts as income, which means they also affect your yearly tax bill.
Tax season can bring a rude awakening for many people who have unknowingly paid too little tax over the year.
CRA’s Debt Collection Powers
When it comes to debt collection, CRA has significant powers. The CRA can:
- seize your assets, including investments;
- freeze your bank accounts;
- garnish your wages;
- register a lien on your property, including a residential home.
Once the CRA starts pursuing a case against you, it’s impossible to ignore.
Eliminate Your Tax Debt
There are solutions to your tax debt problems. A Spergel trustee will work with you to develop a custom solution to meet your specific needs. We can help you file a consumer proposal or bankruptcy, depending on the option that works best for you. These are effective ways to eliminate tax debts and stop interest payments.
When you start a bankruptcy or consumer proposal process, all CRA actions against you will stop immediately. This means you will have some breathing room to organize your finances and work out an arrangement with the CRA for repayment.
Your tax debts are also usually dischargeable, just like credit card or bank loan debts. Once your proposal or bankruptcy procedure is complete, your tax debt will be eliminated.
Contact a Spergel Trustee Near You!
There is a Spergel trustee in your community. Contact us today to learn more about our tax debt solutions and how we can help you stop interest payments, eliminate penalties, and get a fresh start!