Hello the team,
We are in March and if you live and work in Canada, you have certainly received your T4 from your employer. That means, it is time to report your income to the Canada Revenue Agency (CRA). Don’t be surprised, even as temporary residents in Canada (Work Permit), we have an obligation to report our income. To be honest with you, I was apprehensive and afraid of not understanding anything. In the end, not that hard, here are some explanations to help you make your tax return without stress.
The tax system in CANADA
You certainly noticed on your Canadian Payroll that your gross salary was deducted from 3 contributions:
- Canada pension Plan: Contributions for Retirement
- Employment Insurance premiums
- Canada Income Tax: income tax withheld. The return of income and benefits is important because it will be used to calculate the total tax paid and therefore withheld on your salary.
- If you have paid too much tax, you will receive a refund
- If you have paid little, you will have to pay the difference.
- How to make a statement?
Netfile is a fast, easy-to-use and secure service that allows you to send your return online. To use this service, you must prepare your return with one of the software registered for the Netfile program. This software automatically transmits your information to the CRA. There are free and paid versions. Be careful if you file a tax and benefit return for the first time with the CRA just like me, you can only send the form in hard copy.
You have two solutions;
- Prepare your return via software registered for the Netfile program and print the income tax return form, mailed to your local tax Centre
- Or use the general tax and benefit package available on the www.canada.ca website. It contains a declaration and related forms as well as a general income tax and benefit Guide. Once completed, you will only need to post your statement at the tax Centre in your area.
- by phone
It is a new service that is called filing my return and that allows you to file your income tax and benefit return using an automated telephone service. Attention there are criteria for eligibility for this service (hold low income or a fixed income that does not change from one year to the next…). Theoretically, those eligible for this service had to receive a personalized invitation on this subject by mail since mid-February.
I opted for the standard version, à15 $ which guided me step by step. The pre-filled software then fills in your form and tells you an estimate of your tax return. You can at any time, save the filled-in information, close and re-open your session. The payment will be made at the last step when validating and creating the PDF generating your declaration form. Subsequently, I printed my form and forwarded it to the Ontario Tax Centre (envelopes are available for this purpose in the “Canada Post”).
When to make his statement?
No panic, you have until April 30th, 2018 to send your return.
- Volunteers are present in community organizations (attention, there are criteria such as having low incomes and a simple tax situation)
- Accountants or private organizations such as H&R BLOCK (provide service charges)
- Some useful links: All about your income tax return series of videos: How to prepare your return of income and benefits Community program of volunteers in taxes: Get help with your taxes
Tips and Tricks
- Think about tax deductions to reduce the amount of tax you have to pay or increase your tax return. Here you will find the list of deductible expenses. For example, you can infer:
-Transport costs: Attention since 1 July 2017, these charges are no longer deductible. However, it is still possible to deduct amounts paid for monthly or longer-term public transit for the period 1 January to 30 June 2017.
-premiums paid to a private health insurance plan (such as PVT insurance) Oh yes it’s nice, we didn’t pay for anything lol
-unreimbursed health care expenses
- Keep all your documents and vouchers. The Canada Revenue Agency is entitled to ask you for this for a period of six years.
- Be wary of emails, letters, and phone calls that suggest they come from the Canada Revenue Agency. You will laugh, but I received an email telling me that the CRA reimbursed me some money via Interac e-transfer, so asking me my information lol. It’s smiling, but let’s be vigilant.
That’s all we have to do is wait for the notice of assessment with a nice surprise I hope: the tax return.