TAX INFORMATION
Do you have to file income tax?
There are a number of situations that you are required to file a tax return. Most important ones are:
You have any tax payable
you disposed of any capital property such as rental or stocks in the year
you are under demand by CRA to file a tax return
You have Home Buyers Plan or Life Long Learning Plan or are Self Employed and have or CPP payable
you or your spouse wish to receive GST or Universal Child tax Benefit child tax benefits
Dependents
You may be able to claim this amount if you at some time during the year supported a dependent who usually lives with you. Two types of these deductions are:
Spousal amount: if you supported a spouse or common law partner who was a Canadian resident at some time during the year, you can claim them as a dependent. However, your spouse s earnings will limit your claim. For spouses who are out of the country, proof of support is required.
Eligible Dependent: If you were single, divorced, separated or widowed at some time during the year, and supported a child under 18 who is related to you by adoption or in fact, your parents, grandparents, brother or sister over 18 but infirm or disabled, you may claim an eligible dependent amount for that dependent. The dependent s income however, could affect your claim.
Taxable vs. Nontaxable Income
Most of the income earned by the individuals is subject to tax. Some examples of these are:
Employment income
Tips & gratuities
Research grants
Certain support payments
Interest & dividends and other investment income
Regular or lump sum pensions
Income from business, farming, rental or fishing
Old age security or Canada Pension Plan payments
Capital gains
Employment Insurance payments
Universal Child Tax Benefit.
However, some of the incomes received in Canada are exempt from income tax. Some examples are:
GST / HST credit or Canada Child Tax Benefit payments
Quebec family allowances and Allowances for Handicapped Children paid by the Quebec
Lottery or gambling winnings
Most gifts and inheritances
Social assistance and Worker s Compensations Board payments
Most of the civic settlements and insurance company proceeds such a death & health benefits
Strike pay
Military Disability Pension
Status Indian income situated on a reserve
Profits from the sale of the principal residence
Filing Deadlines & Related Issues
You should file your income tax by April 30th of the next year. If either you or your spouse is self employed, then your due date will be June 15th of the next year. If you are late and have any balance owing on your tax return, you may be subject to penalty of 5% and interest of 1% per month for any outstanding balance.
You have normally two types of taxes to calculate; Federal and Provincial taxes. The determination of whether you pay any taxes in Canada or not is based on the residency unlike U.S. which is citizenship . Meaning that you may be a Canadian citizen by law but a non-resident for tax purposes. The rules governing the residency are quite complex and should be discussed with me. If it was determined that you are a Canadian resident, then the province that you resided on December 31st of the tax year, is the province that you pay your provincial taxes to.
What should you bring to the interview?
You should bring all the information slips that reflect your income or deductions from different sources such as T4, T5, RRSP and donations and anything that you feel may be relevant to your tax return. I can advise you if any of those documents are not related to your return or if there is additional information to be provided.
For instance, if you are an employee, bring all your T4s. If you have a business, bring a financial statement or all the receipts and invoices relating to the operation of your business. If you have a rental, we need to have the total rent you collected along with a detail of all the expenses related to the rental property such as mortgage interest and repairs and maintenance.
In case that you do not have some of your slips, your local tax office could print most of these slips for you at no charge.
Do you have to file income tax?
There are a number of situations that you are required to file a tax return. Most important ones are:
You have any tax payable
you disposed of any capital property such as rental or stocks in the year
you are under demand by CRA to file a tax return
You have Home Buyers Plan or Life Long Learning Plan or are Self Employed and have or CPP payable
you or your spouse wish to receive GST or Universal Child tax Benefit child tax benefits
Dependents
You may be able to claim this amount if you at some time during the year supported a dependent who usually lives with you. Two types of these deductions are:
Spousal amount: if you supported a spouse or common law partner who was a Canadian resident at some time during the year, you can claim them as a dependent. However, your spouse s earnings will limit your claim. For spouses who are out of the country, proof of support is required.
Eligible Dependent: If you were single, divorced, separated or widowed at some time during the year, and supported a child under 18 who is related to you by adoption or in fact, your parents, grandparents, brother or sister over 18 but infirm or disabled, you may claim an eligible dependent amount for that dependent. The dependent s income however, could affect your claim.
Taxable vs. Nontaxable Income
Most of the income earned by the individuals is subject to tax. Some examples of these are:
Employment income
Tips & gratuities
Research grants
Certain support payments
Interest & dividends and other investment income
Regular or lump sum pensions
Income from business, farming, rental or fishing
Old age security or Canada Pension Plan payments
Capital gains
Employment Insurance payments
Universal Child Tax Benefit.
However, some of the incomes received in Canada are exempt from income tax. Some examples are:
GST / HST credit or Canada Child Tax Benefit payments
Quebec family allowances and Allowances for Handicapped Children paid by the Quebec
Lottery or gambling winnings
Most gifts and inheritances
Social assistance and Worker s Compensations Board payments
Most of the civic settlements and insurance company proceeds such a death & health benefits
Strike pay
Military Disability Pension
Status Indian income situated on a reserve
Profits from the sale of the principal residence
Filing Deadlines & Related Issues
You should file your income tax by April 30th of the next year. If either you or your spouse is self employed, then your due date will be June 15th of the next year. If you are late and have any balance owing on your tax return, you may be subject to penalty of 5% and interest of 1% per month for any outstanding balance.
You have normally two types of taxes to calculate; Federal and Provincial taxes. The determination of whether you pay any taxes in Canada or not is based on the residency unlike U.S. which is citizenship . Meaning that you may be a Canadian citizen by law but a non-resident for tax purposes. The rules governing the residency are quite complex and should be discussed with me. If it was determined that you are a Canadian resident, then the province that you resided on December 31st of the tax year, is the province that you pay your provincial taxes to.
What should you bring to the interview?
You should bring all the information slips that reflect your income or deductions from different sources such as T4, T5, RRSP and donations and anything that you feel may be relevant to your tax return. I can advise you if any of those documents are not related to your return or if there is additional information to be provided.
For instance, if you are an employee, bring all your T4s. If you have a business, bring a financial statement or all the receipts and invoices relating to the operation of your business. If you have a rental, we need to have the total rent you collected along with a detail of all the expenses related to the rental property such as mortgage interest and repairs and maintenance.
In case that you do not have some of your slips, your local tax office could print most of these slips for you at no charge.