For Canadians, April is “this time of the year”, also known as “damn, I have to fill my tax return again”. Yet, income tax in Canada is a topic I haven’t really written about for one good reason—I am not exactly a specialist.
I do fill my tax return every year and I take pride in doing so. I am happy to contribute to the healthcare system and to the many services we can all use as member of the community. I am usually pretty good at dealing with applications and legalese (I filled my own visa, permanent residence and citizenship applications all by myself, after all!) but to me, tax return forms are cryptic pieces of paper, even after eight years in Canada.
Allan graduated from Concordia University with a major in Finance and a minor in Financial Accounting. After working five years in the accounting industry, he went back to school part-time to pursue a Certified General Accountant designation and obtained it in 2010. He is now a member or the Chartered Professional Association of Quebec.
He specializes in both personal and corporate tax returns.
Can you briefly explain why individuals should fill a tax return?
You have an incentive to fill it: you may be entitled to a refund!
Indeed, the majority of individuals who are employees actually get a refund for filing taxes. These individuals have their taxes deducted of their regular pay cheques at rates set by the government. Filing a tax return is when you get to declare your deductions such as medical expenses, charitable donations, RRSPs childcare expenses, tuition, etc. This is where the refund comes into play. The tax return is simply a reconciliation of your income for the year and all your deductions.
Another reason to file is to receive your child tax benefits. The federal and provincial governments offer financial assistance to families with children under 18. This assistance is based on the family income, however if a tax return is not filed, then the child tax benefits you may be entitled to will come to a halt.
Even if you have no income at all, there is still a benefit to file a tax return. You may also be eligible to receive GST and other credits. The GST credit is paid out to low income individuals on a quarterly basis. Most provinces have their own programs, such as the Solidarity Tax Credit in Quebec and the Ontario Trillium Benefit.
Students enrolled in post-secondary educational institutions should file as well. They receive tax credits and can transfer these credits to their spouse, or parents if they choose to. If the credits are not used or transferred, they will be carried forward to future years and used when the students begin working.
What is the most important tax tip newcomers to Canada need to know?
You may be eligible for benefits such as the GST/HST tax credit, the Canada child tax benefit and the Universal child care benefit. (This is true: a new parents, we discovered the great “baby benefits“!).
Newcomers to Canada can review their tax obligations here.
What’s the most common tax-filling mistake people make?
Not filing taxes as a student enrolled in university or college. Many of my clients suddenly feel the need to file a tax return only once they begin working full-time upon graduation. But when you file your taxes while still a student, you benefit from the GST tax credit, you claim your tuition tax credits and carry them forward. As a student, you generally can use any money that comes your way, right?
Most people have the idea that filing taxes costs you money and stray away from doing so. Filing taxes in these low income earning years actually bring you extra money! And don’t forget that the taxes withheld from those summer jobs get refund as well.
Can you remind us what are the key tax-filling deadlines for individuals in Canada?
There are two deadlines to keep in mind:
- April 30 of each year for all individuals;
- June 15 for those who are self-employed.
Any good websites or resources you would recommend?
The website of the Canada Revenue Agency (the CRA) has a wealth of information.
Finally, newcomers to Canada should check out this page from the CRA’s website.