Here is Everything You Need to Know about the Canadian Tax Return System!
As a newly arrived immigrant in Canada, the tax return system might be one of the crucial aspects of living in a foreign country that will confuse you. It is so precisely due to the differences between the tax systems of various countries. Let us look at the basics of a tax return and how you can file it without any hassle.
What is A Tax Return?
A tax return refers to a document that demonstrates your income, deductions, and credit for a year. One must submit this document to the Canada Revenue Agency (CRA). This document is crucial to judge your tax liability and to determine whether you qualify for any refund or credits due to your financial responsibilities.
As a foreigner working in the country, you must have some income, even if it has not been a year since you arrived. Therefore, for any kind of income, be it from regular employment or investments, you must pay taxes to the Canadian government, for which you will have to file a tax return. Moreover, by filing the tax return, you might qualify to enjoy benefits like the GST/HST credit or the Canada Child Benefit.
The goods and services tax/harmonized sales tax (GST/HST) credit refers to a quarterly payment on which there is no tax for low and modest-income individuals. Moreover, one is eligible for this benefit in the case of the payments of provincial and territorial programs. At the same time, the Canada Child Benefit is a tax-free monthly payment to families who need help raising children under the age of 18. Your tax return will determine whether you are eligible for these benefits.
How to File A Tax Return in Canada?
Firstly, you must file the tax return by April 30th of every year, and if April 30th is a weekend, the deadline is moved to the following business day. This is the deadline if you have a tax liability. On the other hand, if you or your common-law partner or spouse is self-employed, you get to file your tax return by June 15th.
There are two ways to file a tax return. If you want to do it offline, you can order the papers online from the CRA website or call them at 1-855-330-3305. Or else, you can go to the CRA website and utilize the “My Account” option and fill in the necessary information for the tax return.
You will need to provide the following: your name, address, and social insurance number. Moreover, if married, you need to provide their information as well. After this set of basic information, you have to give information on your income. It will found on tax slips such as T3 (Statement of Trust Income Allocations and Designations), T4 (Statement of Renumeration Paid), and T5 (Statement of Investment Income). Along with this, you need to state what deductions or credits you are opting for.
Always remember to keep all official recipes, such as that of medical expenses, business-related expenses, or donations, for at least six years after you file your tax return since the CRA may want to look at them later for any possible credits. Moreover, it is always helpful to take advice from professionals in matters of tax returns.