Approximately 10% to 12% of working-age adults in Canada do not file their income tax returns annually. This represents over 1 million, and in some years, several million individuals. Non-filers are often young (18–24), single, male, or in lower-income brackets, and they collectively miss out on billions in potential government benefits.
File your taxes with confidence
Research conducted in 2020 at Carleton University found that about 10 to 12% of Canadians don't file their tax returns.
Trudeau is right: 40% of Canadians don't pay income taxes, which means someone else is picking up the bill | Financial Post.
It is relatively rare for a Canadian to be convicted of tax evasion but it does happen. Some Statistics: Between 2019 and 2024 there were 135 convictions with a total of $25.1 million in fines imposed: 58 individuals received jail time totalling 108 years.
If you owe taxes and fail to file, the CRA has strong collection powers, including being able to significantly impact the bottom line of your pay cheque. It can: Garnish your wages or bank account. Withhold future tax refunds or benefits.
If you haven't filed your Canadian taxes for three years, you could face financial and legal consequences. The good news? There are ways to fix it, like the CRA Voluntary Disclosure Program. This guide will break down what happens when you don't file, how to get back on track, and how Credit Canada can help.
What happens if you refuse to file taxes? If penalties and interest aren't motivating enough and you outright refuse to file taxes, the IRS can enforce tax liens against your property or even pursue civil or criminal litigation against you until you pay.
But here's the reality: Very few taxpayers go to jail for tax evasion. In 2015, the IRS indicted only 1,330 taxpayers out of 150 million for legal-source tax evasion (as opposed to illegal activity or narcotics). The IRS mainly targets people who understate what they owe.
For a $70,000 income in Canada (using 2025 rates), you'll pay roughly $13,000 to $20,000 in total taxes (federal, provincial, CPP, EI), depending on your province, resulting in a take-home pay around $50,000-$59,000, with federal tax around 14.5% or 20.5% depending on the portion, plus provincial tax and deductions like CPP and EI.
Repeated failure to report income penalty: If you fail to report income of $500 or more on your return more than once within a four-year period, the CRA can impose a penalty equal to whichever is less: 10% of the unreported income or 50% of the tax owed on that amount.
Why? IRS research shows that sometimes people don't file in years their filing status changes, such as due to the death of a spouse or divorce. Emotional or financial reasons may cause a person to not file. Or it could simply be due to procrastination.
In 2022, Canada was ranked 22nd out of the 38 OECD countries in terms of the tax-to-GDP ratio. 1. In this note, the country with the highest level or share is ranked first and the country with the lowest level or share is ranked 38th.
39% of Canadians aged 55-64 have less than $5,000 in savings (-5 pts); 73% have $100,000 or less in savings. More than one in three (36%) women aged 55-64 have no savings at all, compared to one in five (22%) men.
According to a new study published by the Fraser Institute, in 2024 the average Canadian family (including single people) paid $48,306 in total taxes. Given the average family's total cash income was $114,289 in 2024, this means families paid 42.3 per cent of their incomes in taxes levied by all levels of government.
In California, a household can be considered middle class if it makes between $63,674 and $191,042. However, that range can change at the city level. SmartAsset used U.S. Census Bureau's 2023 American Community Survey 1-year data and analyzed the median household income in 100 of the largest U.S. cities and all states.
For example, if you're single and earn $1 million in taxable income, you'll fall into the highest tax bracket, which is currently 37%. This means that you'll pay 37% in federal income taxes on the portion of your income that exceeds the threshold for the highest tax bracket.
Yes, it's possible to go to jail for not filing taxes — but it's rare. The IRS usually seeks to collect money through penalties, interest, and enforcement actions like liens or levies. Jail time is reserved for willful tax evasion or fraud.
Business titans tend to take their compensation as shares in publicly traded companies and privately held businesses, as well as investments in “pass-through” companies with special tax rules.
There's no official limit to how many years you can go without filing taxes, but the IRS expects you to file if required, and the statute of limitations on the IRS assessing tax or collecting never starts until you actually file, meaning they can pursue unfiled returns from any year, even decades old. While the IRS often focuses on the last six years, waiting increases penalties and interest, and you risk losing any potential refunds after three years; proactively filing past-due returns is always best.
In 2021, 370 people were convicted of tax fraud at the Federal level, with an average prison sentence of 14 months. Even if a person is not ultimately convicted, they can be fined and penalized in other ways. Either way, the consequences can be devastating.
Unreported income
The IRS receives copies of your W-2s and 1099s, and their systems automatically compare this data to the amounts you report on your tax return. A discrepancy, such as a 1099 that isn't reported on your return, could trigger further review.