Filing late tax returns when they’re overdue isn’t the end of the world.

Look, it happens. Life gets complicated and you miss the tax filing deadline. Sometimes it’s just for a year or two; sometimes it goes on for longer. But if it’s starting to weigh on you, or if the Canada Revenue Agency is starting to send you scary letters, it’s time to act.

While getting started can be daunting, here are five reasons to file your late returns.

Reason to file #1: Getting your money

This is everyone’s favourite. Obviously, if you know you have a tax refund coming, you should file. That’s your money, and not filing the return is like seeing a hundred-dollar-bill under the kitchen table and not bothering to pick it up.

But even if you don’t have a refund coming, tax refunds aren’t the only source of money that filing a late return can unlock. There are also refundable tax credits – basically amounts the government will send out only if you file a return to show that you qualify. These can include the Canada Child Benefit, the GST/HST credit, and the Guaranteed Income Supplement. If you haven’t filed in a few years and you qualified for some of these refundable credits the whole time, CRA will usually go back and pay you all the back amounts too.

File your return(s) and get your money!

Reason to file #2: RRSP strategies

RRSPs are an area where filing more than one return at once (i.e., filing at least one late return) actually works in your favour. Because RRSP contributions can be carried forward from one year to another, having the perspective of several years can allow you to choose which year in which to apply them.

Choosing the optimal year can help you pay less tax overall, or produce refunds where they’re most helpful (i.e., to avoid late-filing penalties in a year where you might have owed tax).

Reason to file #3: Education amounts

If you were in school during the year, you can report the tuition amounts from your T2202 slip (issued by your university, college, or other qualified institution). They only reduce tax if you earn enough to be taxable, which students often don’t. but they can be carried forward indefinitely and applied when you do earn enough. If they aren’t advantageous in the year you earned them, you can carry them forward to help you in a future year — but only if you file a return in the earlier year.

Reason to file #4: Reducing a tax bill

If CRA has been demanding a tax return for several years, they sometimes file a placeholder return for you. These so-called Notional Assessments always produce a tax bill — and it’s usually much higher than the bill would have been on the actual tax return. You can override a notional assessment, cancelling out some or all of the tax owing, by filing the late return.

Reason to file #5: Reducing Penalties And Interest

Related to Reason #4, you can reduce the penalties and interest on a return that’s been notionally assessed. Penalties and interest are based on the tax owing on a return: the more tax you owe, the higher the penalties and interest. If you can reduce a tax bill by filing the return, the penalties and interest will drop as well.

There are other ways to reduce or even eliminate penalties and interest, including making an appeal to CRA via the Taxpayer Fairness Act, or by making a submission under the Voluntary Disclosure Program.

Bonus reason to file: Less anxiety (the biggest reason)

Having unfiled returns can create frustration in other areas. Obtaining a loan or a mortgage, student loans, assistance, or other credits and benefits often depends on having a history of filed returns.

But more than that, having unfiled returns causes stress in its own right. Most Canadians want to do the right thing. Plus, they want to know that the funds in their bank account are really theirs, and not actually owed to the government.

Every time you think of your unfiled returns it causes stress, robbing you of peace of mind and energy. If you add up all those little twinges over the months and years of being late, it can be terribly expensive emotionally to know that you haven’t filed, or to not know what you really owe.

That, in our experience, is the biggest single advantage to filing your late returns. We have helped so many clients with this and every one of them mentions the amazing feeling of stress lifting off their shoulders. You deserve to have that feeling too.

Are you ready to get started? We promise a judgement free experience that’s easier than you think. Contact us today.