If you are new to Canada, you may be wondering how the Canadian tax system works and what you need to do to file your taxes. Filing your taxes is an important part of your financial responsibilities as a resident of Canada. It also helps you access various Canadian benefits and credits that can support your income and expenses.
In this informative guide, we will explain the basics of filing your taxes in Canada, such as when to file, how to file, and what to expect after you file.
When to file your taxes
The tax year in Canada runs from January 1 to December 31. You must file your tax return by April 30 of the following year. For example, if you earned income in 2023, you must file your tax return by April 30, 2024.
If you are self-employed or have a spouse or common-law partner who is self-employed, you have until June 15 to file your tax return. However, if you owe any taxes, you still have to pay them by April 30.
If the deadline falls on a weekend or a holiday recognized by the Canada Revenue Agency (CRA), you have until the next business day to file your tax return.
How to file your taxes
To file your taxes, you need to fill out a form called the T1 General Income Tax and Benefit Return. This form reports your income, deductions, credits, and taxes for the year. You can find the form and the guide on how to complete it on the CRA website.
You can file your taxes online using certified software or web applications, such as NETFILE or EFILE. This is the fastest and easiest way to file your taxes. You can also file your taxes by mail using a paper form. You can order a paper form from the CRA website or get one from a post office or a Service Canada office.
You will need some information and documents to file your taxes, such as:
- Your social insurance number (SIN)
- Your date of birth
- Your address
- Your income slips (such as T4, T4A, T5, etc.)
- Your receipts for eligible expenses (such as medical expenses, childcare expenses, tuition fees, etc.)
- Your bank account information (if you want to receive your refund by direct deposit)
What to expect after you file your taxes
Review and Confirmation:
After you file your taxes, the Canada Revenue Agency (CRA) will process your tax return and check if the information you provided is accurate and matches the data they have from third parties, such as your employers and banks. If everything is correct, you will receive a notice of assessment (NOA). This is a document that summarizes your tax return and shows how much tax you owe or how much refund you will receive.
Refunds and Payments:
If you are entitled to a refund, the fastest way to get it is by using direct deposit. You can sign up for this service on the CRA’s website or through your online banking. Depending on how you filed your tax return, you can expect your refund in about two weeks if you used NETFILE, or within four to six weeks if you filed by mail.
If you have a balance owing, you must pay it by April 30 to avoid interest charges. If this date falls on a weekend or a holiday, you have until the next business day to make your payment. You can pay online, by phone, or at your financial institution. Visit the CRA’s website for more details on how to pay your taxes.
If you have a balance owing and you file your tax return late, you will face a late-filing penalty of 5% of your balance, plus 1% for each month your return is overdue, up to a maximum of 12 months. You will also pay interest on the unpaid amount, compounded daily. You can find more information about payment options and interest rates on the CRA website.
Filing your tax return on time also helps you access Canadian benefits and credits that are based on your income that can help you with your living costs. These include:
- The Canada Child Benefit (CCB), which is a monthly payment for families with children under 18.
- The Ontario Child Benefit (OCB), which is an additional monthly payment for low- to moderate-income families with children under 18.
- The Goods and Services and Harmonized Sales Tax Credit, which is a quarterly payment for low- to moderate-income individuals and families.
To receive these benefits and credits, you must file your taxes every year, even if you have no income or owe no tax.
One thing to keep in mind is that Canadian residency for tax purposes is not the same as residency for immigration purposes. You may be considered a resident of Canada for tax purposes even if you are not a permanent resident or a citizen of Canada. To learn more about residency status and how it affects your taxes, visit the CRA website or consult a tax professional.
We hope this guide has given you some useful information about filing your taxes in Canada. If you need more help or have any questions, you can contact the CRA by phone or online.