Personal Tax return

Help with Tax Return Processing in Canada

Preparing personal tax returns can be a complex process for many Canadians. Our team of professionals can support you in preparing your tax returns and expertly navigate this process for you and ensure your returns are prepared correctly and filed with the Canada Revenue Agency (‘CRA’). We can also ensure your returns are filed online, expediting their processing by the CRA and obtaining any refunds sooner than you would with a paper filed return.

Must Know Tax Information

Personal tax returns in Canada are due April 30th each year, though if that falls on a weekend the due date is pushed back to the following Monday. This deadline applies for filing your tax return for the immediately prior calendar year. For individuals who have a sole proprietorship business the filing deadline is June 15th. One key fact, however, is that all taxes due by individuals must be paid by April 30th, so even if your return is due June 15th you need to pay what you owe by April 30th.

All income that an individual earns during the year will be included in their personal tax return and taxed at different rates depending on the type of income received. The most common types of income for Canadians are:

  • Employment Income,
  • Business Income,
  • Dividend Income, and
  • Interest Income

The income you earn will then be reduced by tax credits that are available to you, both basic credits available to all Canadians as well as a large number of tax credits that exist for specific individuals and specific types of expenses. Some common tax credits include:

  • Medical expenses,
  • Tuition expenses,
  • Child related fitness, arts, and care expenses, and
  • RRSP contribution deductions.

This is a very small list, however, as the available tax credits are extensive and very difficult for most individuals to navigate. Tax credits are, however, very important as each one an individual claims can reduce their tax obligations to the CRA. We can assist you with navigating this process and ensure that your taxes are correctly prepared and you don’t needlessly pay more taxes than you have to.

Resident and Non-Resident Tax Return Process

The CRA expects all individuals who are considered residents for tax purposes to file tax returns in Canada each year they are earning income. While for many individuals this is a straight forward issue, as they live in Canada all year, for some this can be an incredibly complex subject. This is because some individuals can still be deemed by the CRA to be residents for tax purposes even if they physically reside outside of Canada. This includes individuals who have a spouse or dependent child in Canada, and can be far broader than that.

The CRA has provided guidance for individuals who may be considered a deemed resident here: Canada Revenue Agency

Even with guidance on the issue of deemed residency, this is very much a grey area for tax purposes thus a consultation with our team is strongly recommended. The reason for this is that there are several tests the CRA can apply to an individual’s circumstances and tax treaties with other countries that also feature prominently in tax residency considerations. There are numerous tax strategies available for individuals who fall into the grey area of deemed residency; a professional help can ensure you don’t pay more tax than you have to.

Non-residents of Canada also have potential tax filing obligations if they earn income in Canada. For many types of income, a percentage has to be withheld from payment to a non-resident and can only be received when a non-resident tax return is filed. This is another complex area where our team of experts can assist as again tax treaties with other countries feature prominently in determine what, if any, tax an individual may owe in Canada.

For a better understanding of what is considered taxable in Canada for a non-resident you can refer to this CRA guide: Non-residents of Canada

Student Tax Returns

It may come as a surprise to many students in Canada but they should be filing their personal tax returns each year, even when they may have little to no income. Firstly, even if you are a in a low income bracket, you should still be compliant with personal tax filing requirements in Canada. Secondly, for the low income bracket that most students are in, there is a good chance of there being a personal tax refund available.

Finally, tax credits are accumulated for each year a student is attending an approved post-secondary institution that can be carried forward to later years. This means that, for many students, the first year or two after their degree they will get large refunds and essentially pay little to no tax. Alternatively, these tax credits can be shared with parents to reduce their immediate taxes.

Our team of professionals can ensure that personal tax returns for students are prepare correctly and ensure you utilize the benefits you are entitled to.

Tax Return in 2016 – Process Estimates and Changes

For individuals needing support in preparing their personal returns for 2016, you can contact us and we can provide an estimate for your specific tax situation. Each individual is unique and as such, the personal tax process will vary on a case by case basis. The sooner you begin thinking about your personal tax return filing, the better as it can make the process smoother and with fewer surprises.

2016 has seen some significant tax changes with the new Liberal government elected, meaning that expert consultation should be received sooner than later to ensure the right steps are taken for your personal situation. We can ensure you receive the expert consultation you need to navigate changes in areas like the family tax cut, child expenses, and sale of a principle residence.