Canada Income Tax Guide
The Canada Revenue Agency releases a new document every year titled, the General Income Tax and Benefit Guide, this guide is a compilation of all five sections on the T1 General Return. This return is what a majority of Canadians will file each and every year to report income and deductions to arrive at an end result of either a refund or a balance owing to the CRA. The Guide follows the format of the T1 General Return, going from line 101 Employment income to line 485 balance owing. It also discusses a variety of different subjects and refers you to other sources of information to help with the completing of the T1 Return.
General Income Tax & Benefit Package
Your General Income Tax and Benefit package includes a copy of the guide, the income tax return, related schedules, and provincial or territorial schedules, information and forms (except Quebec). You may get your tax information from following.
Who has to file income taxes:
- You have a balance owing on your tax return.
- You received a request to file a return.
- You and your spouse or common-law partner elected to split pension income.
- You sold property or realized a taxable capital tax gain.
- You are required to repay Old Age Security (OAS) or Employment Insurance (EI).
- You have not repaid all of the amounts you withdrew from your Registered Savings Plan (RRSP) for a Home Buyers Plan or Lifelong Learning Plan.
- You have to contribute to the Canada Pension Plan (CPP).
- You are currently receiving Working Income Tax Benefit (WITB) advance payments and would like to continue receiving these benefits.
- You still may want to file if any of the following apply.
- You want to receive a refund.
- You want to apply for the Goods and Services Tax/Harmonized Sales Tax (GST/HST)credit.
- You or your spouse or common-law partner want to begin or continue receiving Canada Child Tax Benefit.
- You have incurred a non-capital loss and you want to be able to apply in other years.
- You want to carry forward or transfer the unused part of your tuition, education or textbook amounts.
- You want to report income for that you could contribute to your Registered Retirement Savings Plan (RRSP) so that you can keep your RRSP deduction limit for future years.
- You want to carry forward the unused investment tax credit.
- You are applying for the Ontario Energy and Property Tax Credit.
Filing Income Taxes
You may file your tax return with the Canada Revenue Agency (CRA) by Internet or by mail.
By Internet options: NETFILE or EFILE. The NETFILE option is for a taxpayer who wants to prepare his/her own tax return and send it electronically directly to the CRA. The EFILE option is for a taxpayer who has his/her tax return prepared by a registered electronic filing service provider…such as Liberty Tax Service…who then sends the completed tax return to the CRA electronically on behalf of the taxpayer. Both options require that the tax return be prepared using one of the commercial tax preparation software packages or Web applications certified by the CRA to meet system requirements.
By mail: Mail your completed paper tax return to the CRA tax center serving your region using the envelope included in your tax package.
Canada Income Tax Filing Deadlines & Dates
Canada Child Tax Benefit and Universal Child Care Benefit payments:
- January 20
- February 20
- March 20
- April 20
- May 20
- June 19
- July 20
- August 20
- September 18
- October 20
- November 20
- December 11
Working Income Tax Benefit payments:
- April 2
- July 3
- October 5
- January 5, 2016
- April 30 (most filers)
- June 15 (self-employed filers and their spouses or common-law partners)
- June 30 (TFSA return)
GST/HST credit payments:
- January 5
- April 2
- July 3
- October 5
Instalment payments due:
- March 15
- June 15
- September 15
- December 15
- December 31 (farmers and fishers pay their yearly instalment payment)
RRSP contribution deadline:
- March 2
Income Tax Refunds
When to expect your tax refund:
Four to six weeks for a paper return – CRA does even begin to process returns until mid-February. So do not call before mid-March, even if you filed your return in January.
If you filed your return on or before April 30th wait fours weeks before calling.
If you filed you return after April 30th wait six weeks before calling.
E-file – If you electronically file your return could be processed in as little as eight business days but wait at least three weeks before you call.
You can follow up on your refund on the Internet by accessing My Account, or by telephone by calling the Telephone Information Phone Service (TIPS) at 1-800-267-6999.
Self Employment Taxes, Deductions & Tax Forms
If you are self-employed, you are considered to have a business. If this is the case, you may need information specific to your situation. You first must determine if your business is a sole-proprietor, a partnership, or a corporation.
If you have a sole-proprietorship, or partnership, your income will be reported on the T1 general return using form T2125.
If you have a corporation, you need to complete and file a T2 tax return. This return is completely separate from your personal taxes.
If you are carrying on a business or engaged in a commercial activity in Canada, you are required by law to keep adequate records. These records will help determine your tax obligation, and document any business deductions claimed.
Income is described as all the payments of any type paid to you or on your behalf.
- Canada Child Tax Benefit (CCTB) payments
- Child assistance payments and the supplement for handicapped children paid by the province of Quebec
- Child Support if agreement or court order is after April 30, 1997.
- Gifts: in most cases
- Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments
- Inheritances: in most cases
- Life insurance policy death benefit payments: most amounts received from a life insurance policy following someone’s death
- Lottery winnings
- Social Assistance Payments (SA), but you must still include it on your tax return to ensure that any benefits you may be entitled to are calculated properly
- Workers Compensation Benefits, but you must still include it on your tax return to ensure that any benefits you may be entitled to are calculated properly
- Apprenticeship incentatives
- Bond income
- Business income
- Capital gains
- Child support if agreement or court order is prior to May 1, 1997
- Cleric’s housing allowance
- Commission income from sales, self-employed
- Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) child benefits
- Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) death benefits
- Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) disability benefits
- Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) lump-sum payments
- Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) survivor benefits
- Dividends from taxable Canadian corporations
- Earnings…employment income
- Earnings on life insurance policies
- Employment Insurance (EI) benefits
- Employee profit sharing plans
- Farming income
- Fishing income
- Foreign income: business income
- Foreign income: currency exchange rates
- Foreign income: dividends, interest
- Foreign income: employment income
- Foreign income: pension income
- Foreign income: rental income
- Goods and Services Tax/Harmonized Sales Tax (GST/HST) and Quebec Sales Tax (QST) rebates
- Group term life insurance plan premiums paid
- Guaranteed investment certificates: bank accounts, term deposits, & guaranteed income certificates
- Home Buyers’ Plan (HBP) repayments
- Investment income
- Interest income
- Lifelong Learning Plan (LLP) income
- Net partnership income
- Net federal supplements
- Old Age Security pension income
- Pension splitting income
- Professional income, self-employed
- Registered Education Savings Plan (RESP) income
- Registered Retirement Income Fund (RRIF) income
- Registered Retirement Savings Plan (RRSP) income
- Rental income
- Retiring allowances…severance pay
- Saskatchewan Pension Plan (SPP) payments
- Spousal Support
- Stock options income
- Stocks income
- Supplementary unemployment benefit plans
- Trust income
- Universal Child Care Benefit (UCCB) income
- Wage-Loss Replacement Plan (WLRP) income
Common Tax Deductions, Tax Rebates & Tax Credits
List of common tax deductions and tax credits to help you prepare to file your Canada income taxes.
Your Liberty Tax Service consultant is prepared to help you maximize the value of these potential deductions and credits.
As a taxpayer, you may qualify for the following deductions and credits:
- Pension adjustment
- Registered Pension Plan (RPP) deduction
- Registered Retirement Savings Plan (RRSP) deduction
- Saskatchewan Pension Plan (SPP) deduction
- Deduction for elected split-pension amount
- Annual union, professional, or like dues
- Universal Child Care Benefit (UCCB) repayment
- Child care expenses
- Disability support deduction
- Business investment loss
- Moving expenses
- Support payments made
- Carrying charges and interest expenses
- Deduction for Provisional Parental Insurance Plan (PPIP) premiums on self-employment income
- Exploration and development expenses
- Other employment expenses
- Clergy residence deduction
- Social benefits repayment
- Canadian Forces personnel and police deduction
- Employee home relocation loan deduction
- Security options deductions
- Limited partnership losses of other years
- Non-capital losses of other years
- Net capital losses of other years
- Capital gains deduction
- Northern resident deduction
- Basic personal amount
- Age amount
- Spouse or common-law partner amount
- Amount for an eligible dependant
- Amount for infirm dependants age 18 and older
- Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions on self-employment and other earnings
- Employment Insurance (EI) premiums
- Adoption expenses
- Pension income amount
- Caregiver amount
- Disability amount
- Disability amount transferred from a dependant
- Interest paid on your student loans
- Tuition, education, and textbook amounts
- Tuition, education, and textbook amounts transferred from a child
- Amounts transferred from your spouse or common-law partner
- Medical expenses for self, spouse or common law partner, and your dependent children born in 1989 or later
- Allowable amount of medical expenses for other dependants
- Donations and gifts
- Public transit passes amount
- Children’s fitness amount
- Amount for children born in 1990 or later
- Provincial Parental Insurance Plan (PPIP) premiums paid
- Provincial Parental Insurance Plan (PPIP) premiums payable on employment income
- Provincial Parental Insurance Plan (PPIP) premiums payable on self-employment income
- Federal foreign tax credit
- Federal political contributions
- Federal political contributions tax credit
- Investment tax credit
- Labour-sponsored funds tax credit
- Additional tax on Registered Education Savings Plan (RESP) accumulated income payments
- Net federal tax including “recapture of investment tax credit” and “federal logging tax credit”
- Canada Pension Plan (CPP) contributions payable on self-employment and other earnings
- Social benefits repayment
- Federal tax on split income
- Federal dividend tax credit
- Overseas employment tax credit
- Minimum tax carryover
- Provincial or territorial tax
- Yukon First Nations tax
- Total income tax deducted
- Tax transfer for residents of Quebec
- Refundable Quebec abatement
- Canada Pension Plan (CPP) overpayment
- Employment Insurance (EI) overpayment
- Refundable medical expense supplement
- Working Income Tax Benefit (WITB)
- Refund of investment tax credit
- Part XII.2 trust tax credit
- Employee and partner Goods and Services Tax/Harmonized Sales Tax (GST/HST) rebate
- Tax paid by installments
- Provincial or territorial credits
Canadian Tax Brackets 2014 | Income Tax Brackets
Canadian Tax Brackets 2014 – Canada Federal Personal Income Tax Brackets Below (Provincial Income Tax Rates are not included):
- 15% on the first $43,953 of taxable income,
- 22% on the next $43,953 of taxable income (on the portion of taxable income over $43,953 and $87,907),
- 26% on the next $87,907 of taxable income (on the portion of taxable income over $87,907 and $136,270),
- 29%of taxable income over $136,270
Canadian Tax Brackets 2015 | Income Tax Brackets
Canadian Tax Brackets 2015 – Canada Federal Personal Income Tax Brackets Below (Provincial Income Tax Rates are not included):
- 15% on the first $44,701 of taxable income,
- 22% on the next $44,702 of taxable income (on the portion of taxable income over $44,702 and $89,401),
- 26% on the next $89,402 of taxable income (on the portion of taxable income over $89,402 and $138,586),
- 29%of taxable income over $138,586
Federal tax rates for 2016
- 15% on the first $45,282 of taxable income, +
- 20.5% on the next $45,281 of taxable income (on the portion of taxable income over $45,282 up to $90,563), +
- 26% on the next $49,825 of taxable income (on the portion of taxable income over $90,563 up to $140,388), +
- 29% on the next $59,612 of taxable income (on the portion of taxable income over $140,388 up to $200,000), +
- 33% of taxable income over $200,000.