Whether you're employed, or an immigrant to Canada, we can assess your eligibility to start receiving credits and benefits.
You may be wondering how income tax works in Canada. In addition to helping you collect credits and benefits, we also offer training to help you better understand the Canadian tax system and how it works.
WE PROVIDE YOU WITH A LIST OF SLIPS TO HELP YOU PREPARE YOUR TAX RETURNS.
List of leaflets :
Be sure to bring all the slips and receipts you'll need to file your tax return. See our handy list
HERE IS A SERIES OF QUESTIONS AND ANSWERS TO HELP YOU UNDERSTAND THE CANADIAN TAX SYSTEM FROM A TO Z .
You may ask yourself this question most often: what is income tax?
Income tax is a percentage of a person's income that is owed to provincial, territorial and federal governments to help pay for public works such as road construction or repair, hospitals, the health care system and other government-provided social services. The percentage increases with the amount of income, in what's known as a graduated or progressive tax system. In principle, if you earn more, you pay more tax. However, no one in Canada is taxed at the federal level on the first 15,000 $ (in 2023) earned during the year, called the basic personal amount.
The Canada Revenue Agency's (CRA) perception of income taxes
To work in Canada, you must first have a Social Insurance Number (SIN), which is linked to your identity in the country. Your employer withholds income tax from your salary and remits it to the Canada Revenue Agency (CRA). Then, each year, your employer will send you and the CRA details of your income for the year. From then on, you'll have to report your earnings to the CRA, listing all your earnings and confirming or updating the information they have to determine what tax credits and benefits you're entitled to, and to ensure that your employer has withheld enough tax or that you owe more.
It's also a good idea to file a tax return, even if you haven't earned any income, because there are tax credits and benefits that you can only take advantage of by filing a tax return. These tax credits and benefits include the following:
- Canada Child Allowance - monthly payments to parents or guardians of children under 18, which can amount to up to 6,000 $ per child per year, although the amount is gradually reduced according to your income.
- GST/HST credit - a tax-free quarterly payment that helps low- and modest-income earners offset the GST/HST they pay on goods, which can amount to several hundred dollars a year, and which also declines progressively with income.
- Guaranteed Income Supplement - for low-income Old Age Security recipients.
In addition, to qualify for benefits such as housing assistance, you must provide an up-to-date tax return.
How do you pay your taxes?
First and foremost, you must gather all the documents required to declare your income, which are :
- your social insurance information;
- your income slips from your employer(s), usually T slips (T4 is the most common, or T4A for self-employed people working with certain agencies, usually in the event industry);
- proof of income, especially if you are self-employed;
- investment details, such as RRSP contributions;
- all other receipts that qualify for a tax deduction, such as medical expenses not covered by insurance, home office expenses or deductions related to your business (for example, cleaning supplies for an Airbnb).
What is the deadline for filing my tax return?
The deadline for filing tax returns in Canada is generally April 30, which means that if the deadline falls on a weekend, it's moved to the following Monday. For the self-employed, the tax filing deadline is June 15, but if they have to pay taxes, they're supposed to do so by April 30. So it's not a good idea to wait to pay taxes if you're not sure you'll have to.
If you owe taxes, you're supposed to pay them all at once, or you can contact the CRA directly to set up a payment arrangement. If you file late, you'll have to pay 5 % of what you owe, plus an additional 1 % for each month you're late, up to 12 months.
You can file your return and pay your taxes through the CRA's My Account portal, or you can do it by phone or mail. In addition, you can use the services of a tax preparer, such as Cabinet XP INC, to file your return on your behalf, to ensure that you've done everything correctly and that you get the maximum refund to which you're entitled.
Here's some information on the Canadian income tax system.
- The CRA uses the integrity principle, which means that most of the time, it does not audit your tax return to ensure that you have reported your income accurately. However, your return may be audited for up to six years. That's why the CRA recommends that you keep your tax documents for six years.
- However, if you are negligent in filing your tax return, there is no time limit on how long it can be audited by CRA.
- If you realize you've made a mistake on a previous tax return, you can amend it for up to 10 years.
- If you have earned income in another country, you must declare it. However, Canada has tax treaties with over 90 countries to avoid double taxation.
If you have any questions about how to file your returns and obtain your maximum tax refund, contact us today or fill out the online appointment form available on our website to schedule a meeting with one of our Accredited Representatives with the CANADA REVENUE AGENCY and REVENU QUÉBEC.
