Key Takeaways
- Filing your tax return is an important part of being a Canadian resident. It helps you access benefits, credits, and refunds that you may be eligible for.
- The deadline to file your tax return is April 30th of each year, unless you or your spouse are self-employed, in which case it is June 15th.
- You can file your tax return online or by mail, using the software or forms provided by the Canada Revenue Agency (CRA).
- You will need a social insurance number (SIN), a tax package, and your income and expense information to file your tax return.
- If you need help with filing your tax return, you can contact the CRA, use a free tax clinic, or hire a professional tax preparer.
Introduction
Welcome to Canada, Hustlers! 🇨🇦
As a new Canadian resident, you may have many questions about how to file tax in Canada. Filing your tax return is an important part of being a Canadian resident. It helps you access benefits, credits, and refunds that you may be eligible for. It also helps the government collect revenue to fund public services and programs.
In this article, we will guide you through the steps of filing your tax return in Canada, from getting your social insurance number (SIN) to choosing the best way to file your tax return. We will also provide you with some tips and resources to make the process easier and more efficient.
Whether you are a student, a worker, a retiree, or a business owner, this article will help you understand how to file tax in Canada and what you need to do to comply with the tax laws and regulations.
Let’s get started, Hustlers!
Step 1: Get Your Social Insurance Number (SIN)
The first step to file your tax return in Canada is to get your social insurance number (SIN). Your SIN is a nine-digit number that identifies you as a taxpayer and allows you to work and receive government benefits and services in Canada.
You can apply for a SIN online, by mail, or in person at a Service Canada office. You will need to provide proof of your identity and status in Canada, such as your passport, permanent resident card, or work permit. You can find more information about how to apply for a SIN on the Service Canada website.
Once you have your SIN, you should keep it safe and confidential. Do not share it with anyone who is not authorized to ask for it, such as a landlord, a phone company, or a store. You should also report any lost, stolen, or compromised SIN to Service Canada as soon as possible.
Step 2: Get Your Tax Package
The next step to file your tax return in Canada is to get your tax package. Your tax package consists of the forms and guides that you need to complete and submit your tax return. It includes the following:
- The General Income Tax and Benefit Guide, which explains the rules and instructions for filing your tax return and claiming benefits and credits.
- The Income Tax and Benefit Return, which is the main form that you need to fill out with your personal information, income, deductions, credits, and taxes.
- The Federal Tax Worksheet, which helps you calculate your federal tax.
- The Schedule 1, which lists the federal non-refundable tax credits that you can claim, such as the basic personal amount, the Canada workers benefit, and the climate action incentive.
- The Schedule 11, which is for students who want to claim the tuition, education, and textbook amounts.
- The Schedule 13, which is for newcomers who want to report their world income for the part of the year that they were not residents of Canada.
- The Provincial or Territorial Tax and Credits Form, which helps you calculate your provincial or territorial tax and credits, depending on where you live in Canada.
You can get your tax package online or by mail from the Canada Revenue Agency (CRA) website. You can also pick up a printed copy at a post office, a Service Canada office, or a community organization that offers tax services.
You should choose the tax package that corresponds to the province or territory where you lived on December 31st of the tax year. For example, if you lived in Ontario on December 31st, 2023, you should use the 2023 Ontario tax package.
Step 3: Gather Your Income and Expense Information
The third step to file your tax return in Canada is to gather your income and expense information. You will need to report all the income that you earned in Canada and abroad during the tax year, such as employment income, self-employment income, pension income, investment income, rental income, and social assistance income.
You will also need to report all the expenses that you incurred for earning your income, such as business expenses, moving expenses, childcare expenses, medical expenses, and interest expenses.
To report your income and expenses, you will need to use the slips, receipts, and statements that you received from your employers, clients, financial institutions, government agencies, and other sources. Some of the common documents that you will need are:
- The T4 slip, which shows your employment income and deductions, such as income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums.
- The T4A slip, which shows your pension, retirement, annuity, and other income, such as scholarships, bursaries, and grants.
- The T5 slip, which shows your investment income, such as interest, dividends, and royalties.
- The T2202 slip, which shows your tuition and enrolment fees that you paid to an eligible educational institution.
- The T776 slip, which shows your rental income and expenses.
- The T2125 form, which shows your business or professional income and expenses.
You should keep all your slips, receipts, and statements for at least six years, in case the CRA asks you to verify or support your information.
Step 4: Choose How to File Tax in Canada
The fourth step to file your tax return in Canada is to choose how to file your tax return. You have two options: online or by mail.
Also Read: How to Choose the Best Tax Return Software Canada in 2023
Online
Filing your tax return online is the fastest, easiest, and most secure way to file your tax return. You can use the software or web applications that are certified by the CRA to prepare and submit your tax return electronically. You can find a list of the certified software and web applications on the CRA website.
Some of the benefits of filing your tax return online are:
- You can file your tax return anytime and anywhere, as long as you have an internet connection and a device, such as a computer, a tablet, or a smartphone.
- You can save time and money, as you do not need to print, mail, or deliver your tax return.
- You can get your refund faster, as the CRA can process your tax return within two weeks, compared to eight weeks for paper returns.
- You can access your tax information online, such as your notice of assessment, your tax account balance, and your tax slips.
- You can use the CRA’s auto-fill my return service, which automatically fills in parts of your tax return with the information that the CRA has on file for you, such as your T4, T5, and T2202 slips.
To file your tax return online, you will need to register for a CRA My Account, which is a secure online portal that allows you to access and manage your tax and benefit information. You will also need to create a user ID and password, or use a sign-in partner, such as your bank, to log in to your CRA My Account.
By Mail
Filing your tax return by mail is the traditional way to file your tax return. You can use the paper forms and guides that are provided in your tax package to prepare and submit your tax return by mail. You can also use the software that are certified by the CRA to print and mail your tax return.
Some of the drawbacks of filing your tax return by mail are:
- You may have to wait longer to receive your tax package, as the CRA may not mail it to you until February or March of each year.
- You may have to pay for postage and envelopes, as the CRA does not provide them for free.
- You may have to wait longer to get your refund, as the CRA can take up to eight weeks to process your tax return, compared to two weeks for online returns.
- You may not be able to access your tax information online, unless you register for a CRA My Account and link it to your paper tax return.
To file your tax return by mail, you will need to fill out the forms and schedules that are relevant to your situation, sign and date your tax return, and attach all the required slips, receipts, and statements. You will also need to include a cheque or money order if you owe any tax, or a direct deposit form if you want to receive your refund electronically.
You can find the mailing address for your tax centre on the back of your tax package or on the CRA website. You should mail your tax return as early as possible, and no later than April 30th of each year, to avoid any late-filing penalties or interest charges.
Step 5: Get Help with Filing Your Tax Return
The fifth and final step to file your tax return in Canada is to get help with filing your tax return if you need it. Filing your tax return can be confusing and overwhelming, especially if you are new to Canada and not familiar with the tax system. Fortunately, there are many resources and services that can help you with filing your tax return, such as:
- The CRA website, which provides a wealth of information and tools for taxpayers, such as the tax package, the certified software and web applications, the auto-fill my return service, the tax calculator, the tax tips, and the frequently asked questions.
- The CRA phone line, which allows you to speak to a CRA agent or use the automated service to get answers to your tax questions, check your tax account balance, track your refund status, and more. You can call the CRA at 1-800-959-8281 for individual inquiries, or 1-800-959-5525 for business inquiries.
- The CRA My Account, which is a secure online portal that allows you to access and manage your tax and benefit information, such as your notice of assessment, your tax account balance, your tax slips, your benefits and credits, and your direct deposit information. You can also change your address, marital status, and other personal information online.
- The free tax clinics, which are offered by community organizations across Canada, with the support of the CRA. These clinics are staffed by volunteers who can help you prepare and file your tax return for free, if you have a modest income and a simple tax situation. You can find a free tax clinic near you on the CRA website.
- The professional tax preparers, which are individuals or businesses that charge a fee to prepare and file your tax return for you. They can help you with complex tax situations, such as self-employment, rental income, foreign income, or capital gains. You can find a professional tax preparer near you on the CRA website or by searching online.
However, no matter how you choose to file your tax return or who you get help from, you are ultimately responsible for the accuracy and completeness of your tax information. Therefore, you should always review your tax return before submitting it, and keep all your documents and records for at least six years.
Conclusion
Filing your tax return in Canada may seem daunting at first, but it is not as hard as it sounds. By following the steps and tips that we have outlined in this article, you can file your tax return with confidence and ease.
Remember, filing your tax return is not only a legal obligation, but also a great opportunity to access benefits, credits, and refunds that you may be entitled to. It also helps the government collect revenue to fund public services and programs that benefit you and your fellow Canadians.
So, what are you waiting for, Hustlers? Start filing your tax return today and enjoy the rewards of being a Canadian resident!