How to File Your taxes in Canada - A Beginners Guide

Are you an American visiting Canada soon? Where should I file my Canadian taxes? File your taxes in Canada. American citizens and residents may qualify for a tax treaty. If you live in one of the 50 states having a tax treaty with Canada and want to save money on taxes, open a tax account with CBC Money and plan ahead. Read on to learn about Canadian tax filing.

How to File Your taxes in Canada - A Beginners Guide

You may assume filing taxes is once-and-done. You're wrong. Many techniques exist to reduce taxes and boost earnings. The government has separate guidelines for single parents home-schooling, married couples, and international students in Canada. To maximize benefits, you must understand how taxes work. This page covers Canadian tax filing basics, including where to save money and which forms to utilize. Our previous articles cover filing individual and group tax returns in detail: Should I file my taxes myself? How should I complete my income tax return?

Taxes don't have to be scary or mysterious. If it seems that way, it's probably because no one taught you this talent. To simplify this beginner's guide to Canadian taxes, we'll start with the basics.

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What is tax filing in Canada?

In Canada, the process of filing one’s taxes is known as “filing”. There are a number of methods you can use to file your taxes in Canada, including online. You’re not required to use the online system, but if you do, you’ll need to create an account at Generally, you’ll use this account to make payment reminders, track your credits and deductions and request forms.

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What is tax in Canada?

In Canada, taxes are known as “income taxes” and “property taxes”. Other taxes, including certain sales taxes, may also be called “income taxes” or “property taxes” in Canada.

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Where to save money when filing your taxes

Some of the ways to lower your tax bill include: Paying little or no tax on earnings from inherited wealth. Your great-grandfather may have left you some money, but you’re the one who’s responsible for paying taxes on it. If you have no intention of ever spending a single dollar of it, that money is considered to be “earned” and “income” taxes are extremely low. Paying your taxes early. Once you file your taxes, they’re considered “pending”. If you pay them early, you can put the money into an investment fund that will be released once you’re done with your taxes. This is known as a “distribution” and it will help you lower your tax bill in the long run.

So I struggled with how to format this episode because there are so many tax topics to cover but I really didn’t want to scare you away by making things complicated or throwing in a bunch of that finance jargon that I know we all hate.  After drafting and redrafting this lesson I’ve settled on a very beginner friendly overview of our tax system where we will cover:

  • When you need to start filing taxes in Canada

  • What you need to file your taxes

  • The different ways you can file your taxes

  • An explanation of tax brackets

  • And an explanation of tax credits and deductions aka things you can use that allow you to legally pay less tax, which is always everybody’s favourite part because who wants to pay less tax than they need to.

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What forms of tax filing are available in Canada?

There are a number of different ways to file your taxes in Canada. Online filing, which is only available to certain individuals, is the most common method. You can also mail in your completed tax return and pay any applicable tax fee. There are also certain specific forms you may be required to file depending on your income or taxes for certain individuals or types of income.

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Tax changes between 2017 and 2018

Taxpayers will see these key changes over the next four years: 9% will become 12%. Personal income tax will rise from 15% to 19%. Most goods and services will incur GST. Some modifications have "or" next to them. Some of the above changes will affect 2017 and 2018. Changes for 2017 and 2018 only.

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How to manage your investments while you’re filing your taxes in Canada

One of the biggest changes that will affect taxpayers during the next four years is the advent of the new budget and tax laws. No longer will there be a “free 30 day trial” for account holders of certain financial institutions. Now, every financial institution will charge a monthly fee for their services, including credit unions, banks and credit unions. This fee, known as a “charging privilege”, will help fund government contributions and improve the overall quality of service for taxpayers.

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When Must You Begin Filing Your Canadian Taxes?

Canada has no minimum tax filing age. After receiving money, you must file tax returns. If you started a side business and made a few thousand dollars as a student, you should start filing taxes. Even if you are unemployed, you should file a tax return to receive government benefits like the GST/HST credit or the Ontario Trillium Benefit.

There are some misconceptions concerning Canadian citizenship and residency and whether you need to submit a Canadian Income Tax Return. You must file a Canadian tax return if your foreign-based company paid you. If you moved abroad but still receive money from a Canadian business, you must file a Canadian tax return.

If you're watching this lecture, you should file an income tax return. In today's session, I'll show you how to file your taxes, which has many benefits, including accumulating RRSP space. Don't worry.

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Actual Tax Filing Procedures

Tax preparation is actually a very straightforward process to begin with, and I'm going to explain the exact processes with you here, so don't be alarmed if it appears frightening. Aside from that, the news and information we get from the states have undoubtedly intimidated you into thinking that paying your taxes incorrectly will lead to bad things happening. Canadian taxes are lot less daunting, I can tell you of that. In this country, if you file your taxes incorrectly, no one will knock on your home or arrest you for tax evasion. As long as you don't engage in any clever tax ponzi schemes or money laundering, you'll be fine.

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 Step 1:Gather your tax forms 

Getting your tax documentation should be your first step. The government mails you these forms, which have titles like T4 and T4A. Most of the time, you will receive these forms via mail, but as more and more organizations, such as some banks and educational institutions, are switching to online documents, you may occasionally need to search for some of them online. These forms are needed to declare your income for the previous year, including any employment-related income, scholarship or bursary income, investment income, or interest income. For instance, I had to get into my account online and retrieve a T5 form in order to disclose the interest I received from my high% savings account with EQ bank.

By the end of February, the majority of these forms should start to arrive in the mail or become available online, allowing you to start compiling them in time to file your taxes by the end of April.

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Step 2: Organize Your Deductions and Credits

The second thing you should do is investigate and compile a list of any tax credits and deductions you might be able to claim. This is true for everyone, regardless of whether you work for a normal employer or for yourself.

If you work for yourself, you can subtract some expenses from your pay to lower your taxable income. These expenses were required to keep your business running. Many people are unaware of the numerous deductions you are eligible for even if you do not consider yourself to be self-employed, which you can use to reduce the amount of tax you must pay.

I won't go into depth about what they are right now, but if you're curious to find out more about some of the deductions you might be able to make, I'll be providing a lesson about them the following week. Be sure to subscribe to the channel and sign up for our mailing list to receive notifications when that episode is posted. The description contains a form to help you with this.

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Step 3: Decide How You’re Going To File Your Taxes

The third action you should do is to decide how you will submit your taxes. You must choose how you will furnish the CRA with your tax information so that they can process your tax return. You can approach this in a few different ways; choose the one that best suits your needs. Feel free to experiment with new options each year to find the strategy that works best for you.

  • First, the most common way that most people now know to file their taxes is to file them electronically online through a certified tax software like Turbotax.  When you use this option, you complete your tax return yourself online, and depending on the software you choose there are often prompts and questions and information for you along the way that will help you do a pretty good job of it all.  You can find a list of certified tax software on the CRA website, options exist at a variety of different budgets and some of them are even free.  This is a really good option if you’re traditionally employed and your tax situation is relatively easy.

  • Using an accountant to file your taxes is the second option. You provide permission to a qualified person to file your taxes on your behalf. A professional accountant will construct your tax return for you after receiving the data you acquired in steps 1 and 2. They may occasionally follow up with a few questions, but once you have approved the return, it will be submitted to the CRA. If your taxes are more complicated, such as if you're self-employed, an accountant is a really great option to choose because they are knowledgeable about the tax system and frequently end up saving their clients a significant amount of money in taxes that they might otherwise pay by simply not understanding and missing things. I employ an accountant to file taxes for my businesses, and it's well worth the money since a) I know they're doing things correctly, and b) they save me more in taxes than I pay them for the service compared to when I just filed my taxes online myself. An accountant is a great smart choice if you have any tax-related anxiety or if your situation is a little more complicated than merely receiving a T4 form from your company.

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Wrapping up: Is tax filing right for me?

Filing your taxes is a result of considering your demands and earning potential, like many other things in life. There are various strategies to enhance your income and decrease your tax burden. Whether you're a single person, a married couple, a single parent homeschooling a child, or an overseas student studying in Canada, the government has various laws for you. In order to maximize your tax deductions, it's critical to comprehend how taxes precisely function.