If you are living in Canada and an adult, you may be required to file your tax. So, in this article, I will focus on everything you need to know about filing your tax in Canada. Even if you are not required to file taxes, you will find this article helpful. And may help you to take advantage of certain tax credits to add to your savings.
Who needs to file taxes in Canada?
Filing taxes is an obligation for both Canadian residents and newcomers. This includes immigrants, international students, and temporary foreign workers. Generally, the due date of a personal tax return of previous year is on April 30 of every year. For example, for year 2021, the due date is April 30, 2022. If April 30 falls on a Saturday, Sunday or holiday that year, your tax returns will be considered filed on time if the Canada Revenue Agency (CRA) receives them or they are postmarked on the first business day following April 30. This means for 2021 personal tax return, you need to file your return on or before May 2, 2022.
Most newcomers will be able to file electronically through EFILE or mail, though there are some EFILE exclusions for some individuals and non-residents.
What to report and claim on your taxes
While you need to report all income earned from a Canadian source, there are other financial earnings and tax credits that you need to be include in your tax forms. These include:
- Foreign income: If you have income from a different country, you must report it in Canadian dollars on your tax return. If you already paid taxes on the income you received outside of Canada, you might qualify for the Federal foreign tax credit.
- Moving expenses: Generally, you cannot deduct moving expenses incurred to move to Canada. However, you may be able to claim moving expenses if you moved to work or to run a business at a new location, or you moved to study courses as a full-time student enrolled in a post secondary program at a university. Your new home must be at least 40 kilometers closer to your new work location or school.
- Support payments: Even if your former spouse or common-law partner does not live in Canada, you may be able to deduct support payments made.
What documents do you need to file your taxes
When filing your tax, you will need to provide basic information, such as your name and address. Aside these, you will also need the following information handy:
- Social Insurance Number (SIN)
- T4 Slips: If you are employed in Canada, you will receive a T4 slip from your employer. Your T4 slip will outline your total remuneration and source deductions for the year (such as Employment Insurance, Canada Pension Plan and income tax withheld).
- Business receipts: If you are self-employed, you will need to keep business receipts and invoices. This will help you to accurately report your income and claim deductions. Please note that it is important to keep these receipts in case CRA has any follow-up questions.
- Child Care Receipts: If you have have someone look after your child so that you can work or study, you probably have child care expenses.
- Dependant’s Details: This includes basic information about your spouse, children, and/or elderly parents. If you have dependant, you may be eligible for certain tax credits.
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