Personal Finance

Filing T4 and owing money

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  • May 10th, 2021 9:15 am
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Member
Mar 26, 2013
415 posts
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Toronto

Filing T4 and owing money

I worked two different jobs in 2020 but not at the same time, i started filing my tax return online and saw that i owe close to $2,000 and i am not sure how that is possible. What happens if you don’t file and you owe CRA money? Thanks
Last edited by lovetolearn on May 9th, 2021 1:03 am, edited 1 time in total.
13 replies
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Jan 19, 2017
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lovetolearn wrote: I worked two different jobs in 2020, i started filing my tax return online and saw that i owe close to $2,000 and i am not sure how that is possible. What happens if you don’t file and you owe CRA money? Thanks
If you didn't fill out a TD1 form when you started a new job to tell the new employer that you have other job(S), the employers would always under deduct tax from each pay and you will owe tax when you file tax return. If you don't file tax return every year, at the minimum, you won't get any benefits like GST , climate tax credit, CCB, etc.

You could be like this person: https://financialpost.com/personal-fina ... contentads
Deal Addict
Sep 14, 2012
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lovetolearn wrote: I worked two different jobs in 2020 but not at the same time, i started filing my tax return online and saw that i owe close to $2,000 and i am not sure how that is possible. What happens if you don’t file and you owe CRA money? Thanks
At a minimum, what ml88888888 mentioned will happen. If you're a Canadian citizen, you will also not automatically show up in the voter's list so have to go through the process of getting your name on the list if you want to vote.

Depending on how much the government believes you owe them as well as whether you've filed income tax returns in the past, you will probably get a "reminder" letter informing you that you will need to file for a specific tax year. This "reminder" letter will eventually turn into a more "threatening" letter (stating fines, penalties, a daily penalty charge, etc.) and might also mention that they will do/calculate the income tax owing on their own from what information they have and assess you a penalty for this.

This happened to me years ago so I'm going by personal memory here which sometimes isn't good. I also don't remember if this happened for me federally but I believe that it did since I remember having to go to the CRA office in Montreal to meet someone (the reception desk called him when I arrived so it wasn't like I was meeting just anyone in the entrance way of the government building posing as a government employee) and give him my tax return but I'm sure it happened to me provincially (as I have to file a Quebec return)

Finally, you will be paying a late fee as well as paying interest on the amount that you owe them.
Member
Apr 16, 2015
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ml88888888 wrote: If you didn't fill out a TD1 form when you started a new job to tell the new employer that you have other job(S), the employers would always under deduct tax from each pay and you will owe tax when you file tax return.
So many people end up in this situation because they have more than one job in a year. Most employers require you to fill out a TD1 when you start a new job but people often miss the instructions about how to fill it out if you have more than one job (enter 0 at the bottom and check a box on the back). To be fair, the instructions could be clearer and payroll people could be a bit more proactive in pointing this out to new hires. Unless this is done properly, each employer will assume you are entitled to the $13k basic personal exemption and not deduct taxes on that amount of income. So if you have two employers, you will have paid no tax on $26k of income and the unpaid amount is settled up when you file your return.

As for what to do now, file your return and pay the tax. If you can't afford to pay it all at once, call the CRA and ask if you can pay it over time (i.e. monthly installments). Ignoring it won't make it go away. It may work for awhile, but they will figure it out eventually and charge interest and penalties, Plus they have lots of collection power including garnishing your future wages.
Sr. Member
May 24, 2018
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lmcjipo wrote: ... If you're a Canadian citizen, you will also not automatically show up in the voter's list so have to go through the process of getting your name on the list if you want to vote.
@lmcjipo Not updated to the voter's list, maybe (also have to say "yes" to that question).
But not allowed to vote because name not on the voter's list is definitely not one of the consequences ... not in Ontario where I resided.

... on 2nd read, I now see you mean "go thru the process of getting your name on the list" on the spot at the polling station.
Last edited by hwyc2007 on May 9th, 2021 12:05 pm, edited 1 time in total.
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Dec 24, 2007
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lovetolearn wrote: I worked two different jobs in 2020 but not at the same time, i started filing my tax return online and saw that i owe close to $2,000 and i am not sure how that is possible. What happens if you don’t file and you owe CRA money? Thanks
If you don't file, you will be charged a late-filing penalty and arrears interest when you eventually file your return and pay the amounts owing. Interest has been charged on the taxes owing since May 1st.

As the CRA already has all your T4s and other tax receipts, when it gets around to running its matching program after filing season to match up all the tax receipts to tax returns, it will likely be issuing you a Notice of assessment sometime in August or September for the missing amount. There's no point just waiting for the CRA as interest will continue to run until you pay the taxes owing.
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Mar 3, 2018
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To add to Wetcoastguy the late filing penalty is running at an additional 1% per month late till next April. Even if you can't pay now I would file now to stop the late filing penalty clock at least.
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ml88888888 wrote: If you didn't fill out a TD1 form when you started a new job to tell the new employer that you have other job(S), the employers would always under deduct tax from each pay and you will owe tax when you file tax return. If you don't file tax return every year, at the minimum, you won't get any benefits like GST , climate tax credit, CCB, etc.

You could be like this person: https://financialpost.com/personal-fina ... contentads
Just to add more info, Since you owe $2000, it probably means your income is not that high. You probably qualify for the CWB(Canada Workers Benefit), which would reduce your tax. What is your taxable income?
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Sep 14, 2012
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hwyc2007 wrote: @lmcjipo Not updated to the voter's list, maybe (also have to say "yes" to that question).
But not allowed to vote because name not on the voter's list is definitely not one of the consequences ... not in Ontario where I resided.

... on 2nd read, I now see you mean "go thru the process of getting your name on the list" on the spot at the polling station.
I never stated that a Canadian citizen who is over 18 who doesn't or didn't file his/her taxes can't vote. I just wrote that that the person won't appear on the "original list". It happened to me once and it isn't a difficult process but why go through the process if you don't have to.
Deal Addict
Sep 14, 2012
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WetCoastGuy wrote: As the CRA already has all your T4s and other tax receipts, when it gets around to running its matching program after filing season to match up all the tax receipts to tax returns, it will likely be issuing you a Notice of assessment sometime in August or September for the missing amount. There's no point just waiting for the CRA as interest will continue to run until you pay the taxes owing.
They sometimes don't get all financial institutional tax receipts within a timely manner. For example, in my case, they don't have my RRSP contributions that I made via my TD Direct Investing account prior to me filing on April 29, 2021 but they did have my other RRSP contribution tax receipts from Tangerine and RBC.

Also, don't expect them to favourably calculate the amount owing since even if they have your RRSP contributions, they have no way of knowing if you will claim it this year or in an upcoming year. Not only that but they also don't get certain receipts that can be used for taxes (like medical receipts... if your medical expenses for the 12 months is high enough to get something from this).

There was one year that I forgot to declare/include an RRSP contribution and I didn't catch it until 2 years later when I found the receipt and then checked my old income tax return to see if I included it and discovered that I didn't include it. I then filed an amended return/form for this and both the federal government and in my case Quebec, gave me additional money back.
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Apr 16, 2015
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ml88888888 wrote: Since you owe $2000, it probably means your income is not that high.
How do you figure that? A high income person with two jobs could end up in exactly the same position.
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Jan 19, 2017
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catsoncoffee wrote: How do you figure that? A high income person with two jobs could end up in exactly the same position.
That is correct. I was just guessing.
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Jan 19, 2017
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ml88888888 wrote: If you didn't fill out a TD1 form when you started a new job to tell the new employer that you have other job(S), the employers would always under deduct tax from each pay and you will owe tax when you file tax return. If you don't file tax return every year, at the minimum, you won't get any benefits like GST , climate tax credit, CCB, etc.

You could be like this person: https://financialpost.com/personal-fina ... contentads
If he filled out the TD1 form, then Another possible reason is that the total pay from each job is in the first tax bracket. But the total pay from both jobs push into 2nd tax bracket.
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Jun 25, 2008
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Just fill it out, and submit an equal payments pre-authorized payments plan to remit. I did that one year when I miscalculated and owed a decent amount a few years back and it was simple to set up.

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