Income tax is collected from residents of Canada so that the government can afford to provide programs and services such as healthcare, education, highways, income assistance and other programs. If you are low-income, filing your taxes also makes sure that you get benefits from the government like the Working Income tax benefit, GST credit, Universal Childcare and Canada Child tax benefit.
If you are working, tax is usually taken off your pay by your employer, and your employer will give you a T4 slip in January or February every year. Taxes must be completed and sent in to the government by April 30th each year. If tax was not taken off your pay, or not enough was taken off, you may have to pay more tax when you send in your tax return. Or, you may get a tax refund (money back) depending on your situation. If you don’t file your taxes every year you may be fined or have to pay a penalty to the government. Even if you have not made any money, it is important to send in (file) your taxes so that you get benefits you qualify for from the government.
Filing your Tax Return can be confusing. You may wish to pay a small fee to have your taxes done by a professional bookkeeper or accountant who can ensure that you pay the least amount of tax necessary.
Free tax clinics are offered by the Whistler Welcome Centre, the Whistler Public Library, and Whistler Community Services Society (WCSS) each year in March and April. Check our blog or click here for more information.
It is important to keep information all year for your tax return. Be sure to keep your T4 slips from your employer, T5 slips from your bank, donation receipts, child care expenses and your children’s sports and arts program receipts, and to keep track of other costs for your tax return.
Some tax deductions (things that are taken off your income to reduce the amount of income you have to pay tax on) you should know about:
Information can be found on the Canada Revenue Agency (CRA) website: http://www.cra-arc.gc.ca/
If you are new to Canada and have never filed a tax return here, there is a guide for Newcomers to Canada: CRA – Newcomers
CRA also offers an online tutorial for people filing a tax return for the first-time: CRA – Learning About Taxes
If it is the first year that you have to file a tax return, you should send it in on paper. After your first year, you should be sending it in online. You can file online using purchased tax software such as CanTax. There is also free software available. For information on filing your taxes online (called NETFILE) and for free software options, please see: NETFILE
The Canadian Centre for Financial Literacy (CCFL) offers worksheets on money matters including Income and Taxes in 8 languages. See Module 2: CCFL Worksheets