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.
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.
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.
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.
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.
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.
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