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Taxes 101

With tax season fast approaching, many Canadians are busy pulling together the necessary paperwork to file their 2018 tax returns. Tax rules in Canada may differ from those in your home country, so it is crucial that you review the Canadian tax filing requirements and rules. If you established Canadian tax residency on January 1, 2018, or later, you may be required to file your 2018 Canadian tax return by the deadline in year 2019. Reasons for filing your taxes include: if you owe tax, to claim a tax refund or to get benefit and credit payments. The process can seem overwhelming, especially as you adapt to your new life, but here is some helpful information to get you started on the right foot.

Where to seek help

The Government of Canada offers a free online tutorial called Learning About Taxes. Not only will it introduce you to the Canadian tax system, it will also explain how to complete a simple tax return online for free.

Depending on your income level, you may also be eligible to use the free tax clinics hosted by the Community Volunteer Income Tax Program.

When are taxes due?

Most Canadian income tax returns for 2018 are due on April 30, 2019, to the Canadian Revenue Agency (“CRA”). If you are self-employed, or you have a spouse or common-law partner who is self-employed, the filing deadline is June 15, 2019. If you have any balance owing, you are required to pay it by April 30, 2019.

What will I need?

  • Social Insurance Number (SIN): As a newcomer to Canada, you will need a Social Insurance Number (“SIN”). Make sure you have your SIN handy. Everyone who is an employee in Canada must have a SIN, which will become your personal identifier on your tax return and other government documents.
  • T4 slip: Each of your employers is required to provide you with a T4 slip, which outlines your total remuneration and deductions for the tax year to report on your tax return.
  • Business receipts: If you have a new business in Canada, you should keep track of your receipts in case the CRA asks for them at a later date. You are required by law to keep records of all your transactions to be able to support your income and expense claims.
  • Children/Dependents: If you have any eligible dependants, be sure to list them on your return as you may be eligible for tax credits.

Filing your taxes

The Government of Canada will normally accept tax forms that are filed electronically (“EFILE”) or by mail. EFILE is a service that allows authorized service providers to send individual income tax information to the CRA directly via the tax preparation software. EFILE usually provides faster refunds, greater accuracy and ease of payment. However, there are some exclusions to who can EFILE their returns.

For business owners, Scotiabank’s Government Tax Payment Service allows you to pay and file your Federal and Provincial business taxes online.

Foreign income

As a resident of Canada, income earned outside Canada after your arrival here is considered “foreign income” and must be reported in Canadian dollars on your tax return. You may be eligible for the Federal Foreign Tax Credit if you paid foreign taxes on income you received outside of Canada and reported in your Canadian tax return. To claim this credit, you must disclose the foreign income you received along with your profits, losses and gains.

Get the most from your tax return

You may be eligible for certain tax credits and benefits. For example, the Canadian Child Benefit (CCB) is a monthly payment to families with children under the age of 18. To find out about more tax credits and how to apply for them consult the Government of Canada website.

Good luck with your taxes! And remember, when in doubt don’t hesitate to contact the CRA and your tax advisor if you have any questions or concerns.

This publication has been prepared by Bank of Nova Scotia and is intended as a general source of information only and should not be considered or relied upon as personal and/or specific financial, tax, pension, legal or investment advice. We are not tax or legal advisors and individuals should consult with their own tax and legal advisors before taking any action based upon the information contained in this publication. Opinions contained in this publication are our own as of the date hereof and are subject to change without notice. While care and attention has been taken to ensure the accuracy and reliability of the material in this publication, neither Bank of Nova Scotia nor any of its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of such material and disclaim any liability resulting from any direct or consequential loss arising from any use of this publication or the information contained herein. This publication and all the information, opinions and conclusions contained herein are protected by copyright. This publication may not be reproduced in whole or in part without the prior express consent of Bank of Nova Scotia.