Frequently Asked Questions
In general, employers take income tax from your pay and send it to the Canada Revenue Agency (CRA). If you earn additional income from: A rental property or renting out a portion of your home Investments (e.g. interest, dividends, capital gains) Being self-employed (e.g. a home business) Your pension more than one job, you must report these earnings on your tax return as well and send it to the CRA. If you paid too much income tax, you may be eligible for a tax refund. If you paid too little income tax, you may have to pay the CRA, in either a lump sum, or smaller amounts throughout the following year.
The rule of thumb is you don’t need to file unless you owe taxes. However, there are exceptions. Plus, there are many reasons to do your taxes every year, even if you don’t have to. If the government owes you a refund, you’ll need to send in a return to get it. Second, the government uses information from your tax forms to determine if you’re eligible for a number of tax rebates and benefits programs such as the GST/HST tax credit and the Canada child benefit. That’s why you should probably file even if you have little or no income.
If this is your first time filing Canadian Income Taxes, your tax return is usually processed in 16-25 weeks. If this is not your first time filing an Income Tax return, it is usually processed in four to six weeks.
Once you have submitted your tax return, you should receive at least 3 letters from Canada Revenue Agency: Notice of Assessment Letter from the GST/HST Office Letter from the Ontario Trillium Benefit Office It is very important that you read and review the information on the letters you receive as they may be asking you to provide additional information. You should keep these letters, along with your tax return for a minimum of 6 years.
T2202A (Tuition and Enrolment Certificate) is an official statement for income tax purposes. It is issued to all students who paid tuition and fees for qualifying courses that are eligible for claim on the income tax return. The form shows the amount of tuition that can be deducted for income tax purposes as well as the number of months eligible for the education and textbook deduction. T2202A are available by the 3rd week in February for the tuition and eligible fees paid in the preceding calendar year. It can be accessed on your respective college website.
When the Canada Revenue Agency receives your income tax return, they will review your information and send you a summary of the results of your income tax return, also known as a Notice of Assessment. Please review your Notice of Assessment to ensure that all the information is correct. You will need to keep your Notice of Assessment in your files to use it for the next year’s income tax return. Your Notice of Assessment or Notice of Reassessment will show unused tuition amounts carried forward from previous years.
File your taxes, even if you have no income. Even if you had no income last year, you can apply for various government payments (e.g. the Ontario Trillium Benefit, the Ontario Child Benefit and Healthy Smiles Ontario) or qualify for government programs as long as you file your tax return. All domestic and international students must file their tax return annually with the Canadian Government to receive eligible refunds and credits (GST, OST, tuition and education).
You may eligible for: GST/HST credit is a tax-free quarterly payment that helps offset part of the GST or HST that you pay. Ontario Trillium Benefit is a tax-free monthly payment from the Ontario Government. Tuition, Education & Textbook credits.
You must file an income tax return if: you receive any income in Canada (from employment, scholarship/bursary, fellowship, assistantship, investments, etc.) you want to claim a refund. you want to apply for the HST (Harmonized Sales Tax), Ontario Trillium Benefit and other tax credits. you or your spouse or common-law partner want to start or continue receiving Canada Child Tax Benefit payments. Employment income, research grants and investment income are all subject to Canadian income tax. Depending on the amount of money you earned and your eligibility for deductions, you may receive a refund OR have to pay taxes. Even if you did not receive income while in Canada, it is recommended that you complete an income tax return (see next question for more information). If you owe taxes to the government and you do not file your income tax return by the deadline (April 30), you will be charged a late-filing penalty and interest on unpaid amounts.
It is strongly recommended that you fill out a tax return even if you did not receive income in Canada because you may benefit from filing taxes in the following ways: you may qualify for the GST/HST tax credit or the Ontario Trillium Benefit. you may want to claim a refund. you can claim non-refundable tax credits that allow you to carry forward the unused part of your tuition and educational fees to a future year when you may be working in Canada. In other words, these tax credits may be used later to reduce your taxes in future years. you or your spouse or common-law partner want to start or continue receiving Canada Child Tax Benefit payments.
April 30-for most Canadians. This is actually a double deadline. It’s the cutoff for sending in your tax return and for paying your taxes. If you file late and owe money to the government, you’ll face both a late-filing penalty and daily interest charges on your outstanding tax balance. June 15-that’s the filing deadline if you’re self-employed. But if you owe taxes and want to avoid extra charges, you still need to pay up by April 30, like everyone else.
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Federally: 15% on the first $46,605 of taxable income, + 20.5% on the next $46,603 of taxable income (on the portion of taxable income over 46,605 up to $93,208), + 26% on the next $51,281 of taxable income (on the portion of taxable income over $93,208 up to $144,489), + 29% on the next $61,353 of taxable income (on the portion of taxable income over 144,489 up to $205,842), + 33% of taxable income over $205,842. Provincial rates: 5.05% on the first $42,960 of taxable income, + 9.15% on the next $42,963, + 11.16% on the next $64,077, + 12.16% on the next $70,000, + 13.16 % on the amount over $220,000
According to CRA,It takes only two weeks of filing your return online.If you haven’t joined the digital age yet, you might have to wait up to eight weeks. Know what else speeds things up? Signing up for direct deposit, so the government doesn’t have to send you a cheque.
No but if you’re in luck, eager beaver-the Canada Revenue Agency (CRA) started processing tax returns on Feb. 26 this year. The No. 1 reason for filing early is that you get your money back faster. But even if you aren’t expecting a refund, there are good reasons to get your taxes done ASAP. If you face a big tax bill, you can set up a plan to pay it in smaller chunks by April 30. The government won’t apply any charges until the tax payment deadline. Even if you can’t pay off the full balance by then, whatever funds the CRA receives from you by then is less money on which you’ll have to pay interest.
If you owe tax for 2017 and you file your return for 2017 after the due date, we will charge you a late-filing penalty. The penalty is 5% of your 2017 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months. If we charged a late-filing penalty on your return for 2014, 2015, or 2016 your late-filing penalty for 2017 may be 10% of your 2017 balance owing, plus 2% of your 2017 balance owing for each full month your return is late, to a maximum of 20 months.
If you’re looking to lower your taxable income and increase your potential for a tax refund, a great place to start may be by looking at the purchases you already make and the bills you already pay each year. You may be surprised to find that some of these everyday purchases and bills are actually tax-deductible. Medical expenses Childcare expenses Unreimbursed work-related expense Self-employment expense Other expenses For self-employed people… If you have lost receipts for expenses. Can you still claim them? Generally, no; you can’t make tax claims without receipts. All of your claimed business expenses on your income tax return need to be supported with original documents, such as receipts. Without the “evidence” of receipts for your claimed business expenses, the Canada Revenue Agency may decide to reduce the amount of expenses you have deducted. (The one exception is meal and vehicle expenses for moving or for northern residents, as described below.) While it’s true that you don’t send your expense receipts into the Canada Revenue Agency (CRA) when you file your income tax online, as many of us do nowadays, you’re still expected to have those receipts and be able to produce them when asked. Note that you have to have actual receipts for your business expenses before you can claim them. Many business people make the mistake of thinking that a bank or credit card statement is enough proof of an expense. It’s not. All a bank or credit card statement proves is that a payment was made.
There are many deductions but for the purposes of a students, I have listed a few: The Tuition, Education and Textbook Amounts The Public Transit Amount Interest on Student Loans Moving Expenses
Within two weeks of filing your return online, according to the CRA. If you haven’t joined the digital age yet, you might have to wait up to eight weeks. Know what else speeds things up? Signing up for direct deposit, so the government doesn’t have to send you a cheque.
How much you get depends on your location, age, the size of your family, how much money you make and your expenses. Not everyone receives a refund. After the CRA processes your tax return and mails you a notice of assessment, you’ll get a refund if you qualify for money back. If you owe money, the CRA will send you a letter in the mail and you have to pay them by April 30. You can pay online, at your bank, or by mail with a cheque or money order.
Yes. You can file a tax return to claim a refund for the previous ten years. Attach receipts for all the deductions or credits you are claiming.
In general, claiming a non-resident spouse is more or less the same as claiming a resident spouse, as long as you have supported them during the year. Here’s a few things to know to make sure your claims go smoothly: To make your claim properly, you’ll need the correct documentation. The Canada Revenue Agency (CRA) needs proof that you’re in fact providing financial support to your spouse, so when payments are made, keep your documents together. The proof of payment you give to the CRA must include your name, the amount, the date of payment and your spouse’s name and address. The amount you pay to your other half must also be enough to be considered ongoing support – a small payment here or there doesn’t qualify. No matter how much or how little you send your spouse, they won’t qualify if they already have enough income or assistance for a reasonable standard of living in the other country. If your non-resident spouse or common-law partner has some income in your home country, it will also reduce the amount you can claim, even though the income is not reported on a Canadian tax return.