As a newcomer, filing your income tax return for the first time in Canada may be intimidating. You're not alone if you feel this way. Many people dread "tax season."
But there's good news: Unless your finances are complicated, filing your taxes in Canada can be simple and straightforward.
This guide will take you through the basics of how to file your first income tax return in Canada.
If you're a resident of Canada for income tax purposes, you'll need to file tax returns for any tax year in which you have to pay taxes.
Federal and provincial personal income tax returns in Canada are administrated by the Canada Revenue Agency (CRA). If you are a resident of Quebec, you need to file a separate provincial personal tax return.
You become a resident of Canada for income tax purposes when you establish significant residential ties in Canada. These include if you have:
According to the CRA, you usually establish residential ties on the date you arrive in Canada.1
You may have to file a personal income tax return even if you've only been in Canada for part of the year.
File a return if you:
Here's what you'll need to file your tax return. First, you’ll need to provide basic information, such as your name and address. Among others, you will also need the following information.
A SIN is a nine-digit number that's used to access government programs and benefits. Your SIN is not the same as a temporary tax number (TTN) or an individual tax number (ITN).
If you are employed in Canada at any time during the tax year, your employer will issue you a T4 slip. This slip outlines your total renumeration and deductions for the year (such as EI, CPP and income tax withheld).
If you have investment income, you may receive a T5 slip and or a T3 slip.
If you are self-employed, you will need to keep business receipts and invoices to accurately report your income and claim deductions. It is important to keep these receipts in case CRA has any follow-up questions.
These are receipts for childcare expenses incurred to have someone look after an eligible child so that you can work or study.
If you have dependents, such as a spouse, children, or elderly parents, you'll need to provide information details about them in your tax return. You may be eligible for certain tax credits.
There are rules that apply to property you owned before you immigrated to Canada, such as shares, jewelry or artwork. Under these rules, this property is deemed to have been sold and reacquired by you for their fair market value on the date you became a Canadian resident.
You'll need to keep a record of this fair market value, because you'll need this information to determine any taxable gain or loss if you dispose of the property in the future.
Unless you're self-employed, you must file your tax return for any tax year by April 30 of the following year. If April 30 falls on a Saturday, Sunday or holiday that year, returns will be considered filed on time if the CRA receives them or they are postmarked on the first business day following April 30. This means for 2022 personal tax return, you need to file your return on or before May 1, 2023.
If you're self-employed, the due date for your personal return is June 15 of the following year. But if you owe any taxes for the tax year, that amount must be paid by April 30.
There are three different ways to file your return:
If you need help completing and filing your return, meet with a tax professional or tax filer. You may also be able to get assistance and tax tips from free tax clinics run by the Community Volunteer Income Tax Program (CVITP).
Book an appointment to speak to a Scotia advisor to understand how you can invest with tax savings in mind.
Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. References to any third party product or service, opinion or statement, or the use of any trade, firm or corporation name does not constitute endorsement, recommendation, or approval by The Bank of Nova Scotia of any of the products, services or opinions of the third party. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.