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Tag: tax filing

  • Moving abroad? Think about the tax consequences – MoneySense

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    Changing your tax residency

    Canadian residents must report their “world income” in Canadian funds. When they become non-residents, they must file a final tax return as of the date of emigration to report income for the period of residency in Canada and, in some cases, pay a departure tax.

    Tax form filing requirements

    To begin, if the fair market value (FMV) of all property owned as of the date of emigration is more than $25,000, you’ll need to fill out and submit form T1161 List of Property of an Emigrant to Canada. This document must be attached to your T1 return. In fact, even if you don’t file a T1, failure to file this form by your tax filing due date will attract penalties.  

    To calculate a capital gain or loss on your deemed disposition, complete form T1243, Deemed Disposition of Property by an Emigrant of Canada and attach it to your T1 return. Some exceptions apply in both these cases, discussed below. 

    Should you owe money upon departure, but can’t pay because you haven’t sold your property or don’t want to, there is another important form: T1244, Election, under Subsection 220(4.5) of the Income Tax Act, to Defer the Payment of Tax on Income Relating to the Deemed Disposition of Property. Expect to post security in these cases if the capital gain exceeds $100,000.

    Exceptions to reporting requirements

    You don’t have to report the following assets when you leave Canada:

    Note that in the case of your Canadian pensions, non-residents are subject to a 25% withholding tax on the income paid, which is withheld at source by the pension fund. Non-residents can apply to reduce the withholding tax every five years, using form NR5. There may be tax treaty variations, but this would normally be a final tax owed to Canada with no further tax filing obligations on this income source.  

    Note that filing a tax return annually is a prerequisite to receive Old Age Security (OAS) when living abroad. Recipients must meet two other criteria. They must have:

    • Been a Canadian citizen or a legal resident of Canada on the day before they left Canada
    • Resided in Canada for at least 20 years since the age of 18

    Income Tax Guide for Canadians

    Deadlines, tax tips and more

    If you hold the following taxable properties when you leave Canada, you won’t need to report them before you leave. The future disposition of these “taxable Canadian properties” will require filing when these assets are actually disposed of:

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    • Canadian real or immovable property, Canadian resource property, and timber resource property 
    • Canadian business property (including inventory) if the business is carried on through a permanent establishment in Canada

    You can elect to report the FMV of these properties on departure by filing form T2061. This is known as an Election By An Emigrant To Report Deemed Dispositions Of Property And Any Resulting Capital Gain Or Loss.  

    That leaves the non-registered financial assets in investment accounts on your balance sheet to consider. They must be reported on the final return at their FMV, so choose your departure date carefully. Remember, you won’t need to file your T1 return until April 30 of the year after you leave.

    Even if you don’t have investments or real estate or business assets to report, you may not be off the hook: personal-use property with a fair market value of more than $10,000 must be reported on exit. That includes cars, boats, jewelry, antiques, collections, and family heirlooms if together these items are worth more than $10,000 in value.  

    Different rules for immigrants

    The rules are different rules for immigrants who now wish to move on. It is not necessary to pay departure tax on property owned when the person last became a resident of Canada (or property inherited afterward) if residency in Canada was 60 months or less during the 10-year period before emigration. This rule doesn’t apply, however, if the person is a trust, and the property is not “taxable Canadian property.” 

    Penalties for failure to file forms

    You’ll be subject to a penalty if you miss filing a final T1 return. Form T1161—your asset list—attracts its own penalties, too. Whether you file a T1 or not, the T1161 must be filed on or before your filing due date. The penalty for failing to file is $25 for each day it’s late, with a minimum of $100 and a maximum penalty of $2,500. Interest on the balance due and penalties is extra. 

    What about provincial taxes?  

    Remember, the Canadian tax filing system is based on residency, not citizenship. That means you report all your worldwide income in Canadian funds on your Canadian tax return. Your provincial share is normally based on where you lived on December 31 of the tax year. But this also changes to your date of emigration when you leave the country, for the purpose of determining provincial tax residency.  

    Coming back to live in Canada

    If you ultimately change your mind about emigrating or a foreign job opportunity runs its course, it is possible to unwind your departure tax when you become a resident of Canada again, as long as you still own the property you previously reported at FMV when you left Canada. The Canada Revenue Agency (CRA) notes that if you make this election for taxable Canadian property previously reported, you can reduce the gain up to the amount of the gain that you reported.

    For other properties, reduce the amount of the proceeds of disposition that you reported on your tax return by the least of the amount of the gain reported on your final T1 on departure, the FMV of the property when you returned, or any other amount up to the lesser of those two amounts. At this point your tax situation has become complex, so you’ll probably need professional help to get it right. Dealing with the CRA on these compliance issues can be very time-consuming. 

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    Evelyn Jacks, RWM, MFA, MFA-P, FDFS

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  • Late filers: Get your back taxes sorted before year-end – MoneySense

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    Consider the following: 

    The backdrop. Under the Income Tax Act, the normal reassessment period is three years from the date the notice of assessment or reassessment is mailed or received. However, under the taxpayer relief provisions, it is possible to request adjustments for errors or omissions for personal returns for 10 years. 

    Tax year 2015 in focus. Tax year 2015 will become statute-barred under the 10-year taxpayer relief provisions after December 31, 2025. That means, for the 2015 tax year, the following opportunities to save tax dollars now and in the future will be lost:

    1. Tax refunds owed to you for the 2015 tax year.
    2. The opportunity to build RRSP contribution room for tax year 2015, which reduces the potential for retirement income security in the future.
    3. Deductions and non-refundable tax credits that have “carry over” legs attached to them, such as moving expenses, medical expenses, charitable donations and political contributions.
    4. Refundable tax credits owed such as Canada Child Benefit, GST/HST Credit, Canada Workers Benefit, and refundable medical expense supplement.
    5. Unreported losses including capital and non-capital losses will not be available to offset their respective income sources for 2015 or for carry-over purposes. This can significantly increase future taxes payable in some cases.
    6. The opportunity to use the lifetime capital gains exemption for dispositions that occurred in 2015. 
    7. AMT (Alternative Minimum Tax) carry-forwards from prior years can no longer be applied to 2015.

    Spousal returns could be affected. When one spouse fails to file, it means that household income is not properly reported for income-tested provisions. If the spouse who filed on time didn’t estimate their missing spouse’s net income properly, it is possible some of the tax preferences received by spouse who filed on time will have to be repaid in the event of a CRA audit, and/or taxes payable will be increased. In some situations, for example when certain properties are transferred or there are joint financial transactions, spouses may also liable for each other’s tax debts. 

    Income Tax Guide for Canadians

    Deadlines, tax tips and more

    Provincial tax credits have different rules. Not all provisions on the federal T1 return qualify for a 10-year adjustment for errors or omissions. The normal reassessment period for federal returns— three years from the date of the original notice of assessment—is all that is available for these purposes in most provinces. In Quebec that reassessment period is four years.  

    Pension income splitting with spouse. Certain elections that can reduce your taxes have different filing rules as well. For example, optimization of pension income splitting or joint elections to do the income splitting on Form T1032 have a three-year window only—that is, three calendar years after the filing due date. In the 2023 tax year for example, which had a filing deadline of April 30, 2024, adjustments can only be made for tax years 2024, 2025 and 2026. Taken another way, by April 30, 2026, adjustments for this provision can only be made for calendar year 2025, 2024, and 2023. 

    Beware the loss of social benefits. It is only possible to go back 11 months to claim missed Old Age Security (OAS) benefits that were not deferred, unless there was a severe incapacity that kept the senior from applying for the benefits. OAS is income-tested; that is, a clawback of the benefits you are entitled to may occur when net income exceeds certain thresholds for the year. So, filing a tax return is necessary.

    Other social benefits include the new Canada Dental Care Plan (CDCP) and the Canada Disability Benefit (CDB).  

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    • Under the CDCP, the CRA may reconsider an entitlement if you apply within 24 months after the benefit period ends. However, if a false or misleading statement was made, the government has 72 months (six years) to recover this tax debt from you. 
    • The CDB, available since July 2025, allows for retroactive payments for up to 24 months if you were eligible during that time, starting in July 2025. Again, the government has a six-year limitation period to recover any overpayments from beneficiaries.

    Why late filing is generally a bad idea

    It always pays to file a tax return on time for the reasons above. The missed deadlines can cost even more when timelines for other provisions come into play. Overdue taxes owing attract big penalties and interest. There are a number of expensive penalties that can pile up—with compounding interest charges and of course the taxes themselves due—for people who owe money to the CRA and miss filing their returns. These may be deemed one or more of:

    • Gross negligence. This is a civil penalty CRA can levy for turning a blind eye to tax filing obligations. It is calculated at 50% of the taxes due. Interest compounded at the prescribed rate plus 4% more can turn the tax balance due into a rapidly snowballing problem. Late filing penalties are of course added on as well.
    • Tax evasion. Other punitive penalties that may be possible in the case of deceit include tax evasion, which results in a penalty worth 200% of the taxes owing plus compounding interest plus civil penalties and up to five years in jail.
    • Tax fraud. Under Section 380 of the Criminal Code, delinquent tax filers may receive a sentence of up to 14 years in prison. Other consequences include fingerprinting and foreign-travel restrictions.

    To pay the least possible when you owe CRA, first have a tax specialist confirm the taxes were assessed correctly by the agency (sometimes they aren’t, due to missing information or certain gray areas in the law). Then pay quickly. 

    Bottom line

    Always bear in mind that access to any tax preferences and benefits starts with filing a tax return. Plan well before the end of 2025 to catch up. File missed tax returns or request adjustments for errors or omissions. There might even be a little financial freedom coming your way compliments of CRA in 2026. 

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    Read more about how to minimize taxes:



    About Evelyn Jacks, RWM, MFA, MFA-P, FDFS


    About Evelyn Jacks, RWM, MFA, MFA-P, FDFS

    Evelyn Jacks is President of Knowledge Bureau, a world-class financial education institute where readers can take micro-credentials in Financial Literacy, the Fundamentals of Income Tax Preparation, and earn career-enhancing Specialized Credentials, all online.

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    Evelyn Jacks, RWM, MFA, MFA-P, FDFS

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  • What you should know about cryptocurrency tax in Canada – MoneySense

    What you should know about cryptocurrency tax in Canada – MoneySense

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    Even if you’re simply buying, trading and selling crypto as an investment, the CRA might still view your earnings as business income—especially if this is something you do frequently with the intention of turning a profit.

    Some of the factors the CRA considers in determining whether investment gains count as business income include:

    • Frequency of activity
    • How long the assets are held
    • Intention when assets were purchased
    • Amount of time spent on the activity
    • Level of knowledge required to conduct the activities

    “Identifying your earnings as business income or capital gains is probably the most important reporting decision when it comes to cryptocurrency,” says Riley Storozuk, advanced financial planning manager at IG Wealth Management in Winnipeg. If you’re not sure whether your crypto earnings are business income or capital gains—or how to figure out crypto taxes—consult a tax professional.

    How is crypto taxed in Canada?

    As is the case with other types of capital investments, you only report gains or losses in the tax year that you dispose of them—in other words, when you cash out or trade your holdings. So, if you buy and hold cryptocurrency, it’s not a taxable event. Same goes if you send crypto from one exchange to another, assuming both wallets are yours. “That’s the only major crypto transaction that’s not taxed,” says Storozuk.

    All other crypto transactions, including trading one cryptocurrency for another, cashing out your coins, buying goods or services, or gifting crypto to charity, friends or family, are taxable events. Any increase in the value of your crypto between the time you got it and when you disposed of it is a capital gain (or business income, as explained above); any decrease in value is a capital loss (or business income loss).

    As for crypto ETFs, which hold either crypto coins or shares of cryptocurrency-related companies, they follow the taxation rules for securities. If you hold crypto ETFs in a registered account, such as a registered retirement savings plan (RRSP) or a tax-free savings account (TFSA), however, their growth is tax-sheltered.

    Crypto record-keeping tips

    You must keep detailed records of all your crypto activity for six years, as the CRA can request to see them at any time. For each transaction, include a date and description (e.g., purchase, transfer or trade), the type of cryptocurrency and its value at the time. (View the CRA’s list of crypto records to keep, including expenses related to crypto mining.)

    “If you’re using a coin-based exchange, you should be able to pull all that information by looking at your blockchain ledger,” says Maneisha. If you’re using multiple exchanges—making it difficult to track all of your activity—you could use an app such as Crypto Tax Calculator to aggregate the data, she says.

    Working with a tax professional can help ensure the tax treatment of your transactions is being accounted for correctly and the positions you’re taking are reasonable, says Maneisha. “This is especially helpful in the event of an assessment or audit by the CRA.”

    How to report crypto on your income tax return

    If you’ve determined that your crypto earnings are considered business income, you’ll need to complete form T-2125, Statement of Business or Professional Activities. You may want to consult with a tax pro, as well—if you’re running a crypto business, you should be able to deduct a variety of business expenses, such as subscriptions, memberships, your internet connection and expenses related to your home office. “Only the business portion can be deducted,” says Maneisha, “not the personal-use portions.”

    If your business income from crypto (after expenses) is in the negative, it’s considered a non-capital loss, which can be deducted from any other sources of income you had that year (including employment or investment earnings) to lower your taxes. If you don’t have enough income in total to make use of the loss deduction, you can carry back non-capital losses up to three years and apply them to previous years’ tax returns, or carry them forward up to 20 years to reduce your taxable income in the future.

    Capital gains or losses are reported on Schedule 3 of your personal income tax return. Keep in mind that, as with other investments, capital losses can only be used to offset capital gains. Those gains need not be from other crypto investments. “You can harvest losses from one sector to offset gains in another,” says Storozuk.

    Finally, be aware of the superficial loss rule, also known as the 30-day rule. “If you buy crypto—or stock—and sell it at a loss, and you, or an affiliated person, such as your spouse, buy it back within 30 days, then it’s not considered a loss for tax purposes,” says Maneisha.

    Is there any way to shelter crypto earnings from income tax?

    In a word, no. “You can’t hold cryptocurrencies in registered tax-sheltered accounts, such as RRSPs and TFSAs,” Maneisha says. If you want to speculate in crypto markets within such accounts, you could opt for crypto ETFs and other related investments instead. 

    Are NFTs taxable, too?

    Yes, non-fungible tokens (NFTs) are taxable, and the CRA will consider the same factors that it does when assessing crypto activity. Again, keep detailed records of your transactions and consult a tax pro if you need guidance.

    If you’ve never reported your crypto earnings to the CRA, you may be on the hook for unpaid taxes, penalties and/or interest on your capital gains or business income. Voluntarily correcting your tax affairs may help you avoid or reduce these charges.

    One last thing to note as you’re prepping your tax return: The CRA won’t accept payment in cryptocurrency. So, if you do owe taxes this year, make sure to have enough cash on hand to remit your payment. “That has been shocking to a lot of people I talk to who have all of their wealth/liquidity tied up in crypto,” says Maneisha. “They didn’t realize they’d have to cash out to pay their taxes.”

    Read more about crypto:

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    Tamar Satov
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  • How long it takes to get your tax refund in Canada—and how to spend your refund – MoneySense

    How long it takes to get your tax refund in Canada—and how to spend your refund – MoneySense

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    10 ways to use your tax refund

    How you choose to spend your tax refund will often boil down to your tax bracket and debt profile, Forward explains, and working with a certified financial planner (CFP) can help you cut through the noise and allocate it wisely. Here are 10 savvy ways to spend your tax refund. 

    1. Pay down credit card debt

    “If you’re carrying credit card balances, you might want to go in that direction to get rid of any of those balances so that you’re not paying interest that you don’t need to pay,” says Forward. Eliminating or significantly reducing credit card debt with your tax refund can save you money in the long run and improve your overall financial health and creditworthiness.

    2. Start an emergency fund

    Building an emergency fund with your tax refund can provide a financial safety net for unexpected expenses and prevent you from going into debt during emergencies. Consider a high-interest savings account (HISA) for your emergency fund to earn interest on your savings and interest on the interest, which is called compound interest. (Check out MoneySense’s compound interest calculator).

    3. Start a first home savings account (FHSA)

    If home ownership is a future goal for you, setting up a first home savings account (FHSA) with your tax refund can kickstart your journey to becoming a homeowner. You’re limited to $8,000 a year and a maximum of $40,000, but it’s a solid first step to owning your first property that only first-timers can take advantage of. 

    4. Open a TFSA

    If you haven’t created any financial goals yet but still want to be intentional with your tax refund, opening a tax-free savings account (TFSA) with your tax refund can help you grow your savings tax-free and provide flexibility for future financial goals.

    5. Make an RRSP contribution

    Contributing to an RRSP with your tax refund can help you save for retirement and reduce your taxable income. Still, Forward explains that this option may be less important if you need the money sooner or already have a pension. “A younger person might not be thinking about RRSPs because they’ve just started their career,” says Forward. “RRSPs make more sense when you’re in your highest tax bracket, and you can get the most bang for your buck.”

    6. Make a prepayment on your mortgage

    If you have a mortgage with a prepayment privilege, you may use your CRA tax refund to make a prepayment on your mortgage. It goes directly toward your principal owing, so you can reduce the overall interest you pay and shorten your mortgage term. Most lenders limit how many times you can pre-pay each year, but maxing out allowable prepayments can save you a lot of interest in the long run.

    7. Pay down your student loan

    If you’ve got any lingering student debt, using your tax refund to pay down student loans can help you reduce your debt burden and save on interest payments over time. For more tips, check out “Student Money: “How to pay for school and have a life—a guide for students and parents.”

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    Alicia Tyler

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  • How are bonuses taxed in Canada? – MoneySense

    How are bonuses taxed in Canada? – MoneySense

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    Maybe that money is already spoken for. Many Canadians are struggling financially right now, so a bonus or salary increase might simply help cover the rising cost of living or create a bit of breathing room in your budget. But if you’re keeping up with monthly obligations like rent, mortgage payments, household bills and loans, you may have some flexibility in how you allocate those bonus bucks—including saving towards your financial goals.

    “Year-end bonuses are very exciting and tempting,” says Reni Odetoyinbo, a financial influencer in Toronto who shares money tips on her site, Reni, The Resource. “I like to look at all my goals for the year and see if anything needs topping up to decide how I spend the bonus.” (Read her Q&A with MoneySense.)

    Are work bonuses taxed?

    Before you start divvying up your dollars: Know that bonuses are taxed like your other wages, so you may not receive as much as you think. Your employer will also deduct Canada Pension Plan (CPP) contributions and employment insurance (EI) premiums, unless you’ve reached your CPP and EI maximums for the year. 

    If you don’t need that bonus money right away, you could have your employer transfer it directly into your registered retirement savings plan (RRSP), if you have RRSP contribution room. No federal or provincial taxes will be withheld.

    “Of course, the RRSP money is likely going to be stored away for a longer term, so if you have some more immediate needs, these are important to consider,” says Odetoyinbo. On that note, below are five ideas for how to spend a work bonus, plus links to tips and resources for each one.

    Bonuses, RRSPs and taxes

    Most employees get their bonus in February, a detail that matters when it comes to filing your taxes. “Employment income—salary or bonus—is taxable when paid,” says Jason Heath, a Certified Financial Planner and MoneySense columnist. “So, a February 2024 bonus is taxable in 2024, even though it may be tied to 2023 performance by the employee or the company.” 

    This can create an unfortunate mismatch, Heath notes. “Asking your employer to deposit your bonus directly to your RRSP can result in your full pre-tax bonus being invested right away. But watch out. If you do this in the first 60 days of the year, you get to claim the deduction on your previous year’s tax return. But the bonus is taxable in the year that it is received. Unless you do this every year, you could end up with a tax refund one year, but a balance owing the next year.”

    Using this year’s bonus as an example, Heath says that if you direct your February 2024 bonus into your RRSP pre-tax, you’ll get an RRSP receipt for 2023. This could result in a tax refund for 2023; however, the income will be taxable in 2024, with no tax withheld. 

    1. Pay off credit card bills and other high-interest debts

    If you have high-interest debt on credit cards or a line of credit, paying it down with a lump sum could save you hundreds of dollars in interest payments, notes Odetoyinbo. “A payment to your 19.99% credit card debt is one of the best returns you can get.”

    If you’re carrying a balance on one or more cards, use proven strategies to pay it down, such as switching to a low-interest credit card or balance transfer credit card—both can help slow the accumulation of interest. You could also explore consolidating your debt into a single payment plan. 

    2. Pay down your student debt

    Do you still have student debt hanging over your head? If you aren’t carrying any debts that charge higher interest (like credit card debt), consider putting your bonus toward your student loan. For the 2021–2022 academic year, the average Canada Student Loan balance at the time of leaving school was $15,578, according to Employment and Social Development Canada. It also notes that borrowers typically repay the money over nine and a half years—imagine slashing that by a year or two. 

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    Jaclyn Law

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  • Can you file multiple years of income taxes together in Canada? – MoneySense

    Can you file multiple years of income taxes together in Canada? – MoneySense

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    That’s important in an increasingly digital world. Hard copy does matter. For example, if you’ve closed bank accounts, says Wall, you may not be able to get the statements you need to file past years’ tax returns, especially if you don’t have the receipts or invoices.

    If you just have a T4 and no claims for discretionary expenses like childcare, medical, moving expenses, donations or tuition fees, your documentation requirements will be simpler, but if you have those expenses to claim, you’ll need some kind of documented proof.

    This is important because the CRA says all documents must be legible and reproducible. Wall says in some cases the documents, like medical expenses or receipts for a small business, don’t have to be original copies. It can be a scan—CRA is increasingly asking for electronic receipts. However, credit card or bank statements are not valid for these claims—you need to keep the receipts.

    “You can go ahead and file a return and if you’re never audited, you might be fine,” he says. “But if you file the return and it gets audited, and you can’t produce the receipts, then they will deny those expenses, and could turn a refund into a balance due.” He says that usually, when someone is filing multiple years that are late, your probability of getting audited increases, especially if you’re self-employed. Filing late in those cases will attract those late filing and potentially gross negligence penalties to add to the tax burden.

    Can you avoid interest on tax returns owed for multiple years?

    Penalties and interest happen when you file late and owe the government money. They can also happen after an audit, when CRA disagrees with your claims.

    In some cases, it is possible to plead “hardship” under the Taxpayer Relief Program. For example, if an extraordinary circumstance caused you to miss filing a return, such as a death in the family, serious illness or other serious circumstance. Certain delays in resolving an audit or incorrect information provided by the CRA may have caused you to be unable to fulfill your obligations, and you can apply for relief in those cases too. File the Form RC4288, Request for Taxpayer Relief Cancel or Waive Penalties and Interest to request relief. Sometimes financial hardship can be used as a reason for a relief request, but detailed records must be submitted.

    But if you want to get prosecution relief, possible penalty relief and partial interest relief, you can take advantage of the Voluntary Disclosure Program. You have to voluntarily come forward to fix any mistakes in your tax filings before the CRA knows or contacts you about it. The program is open to any taxpayer, from individuals, employers, and corporations to partnerships and trusts.

    You will have to pay the taxes owed plus either the full or partial interest, but you may receive some form of relief, based on the discretion of the CRA.

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    Renée Sylvestre-Williams

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  • How to fill out a personal tax return for 2023 – MoneySense

    How to fill out a personal tax return for 2023 – MoneySense

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    • The basic personal amount
    • The age amount
    • Amounts for spouse and dependents
    • Adoption expenses
    • CPP and/or QPP contributions
    • Employment insurance premiums
    • Home buyers and home accessibility amounts
    • Digital news subscription expenses
    • Tuition/education/textbook amounts (complete Schedule 11)
    • Medical expenses
    • Donations and gifts (fill out Schedule 9)

    Part C, Net federal tax:

    There are more opportunities for tax reductions in this section, including the common dividend tax credit and the less common minimum tax carry forward on split income and political contributions tax credits. The advance received on the Canada Worker’s Benefit by lower income earners is also recorded here.

    Step 6: Refund or balance owing

    You’ve reached the final stage where you’ll find out whether you will receive a tax refund or if you owe taxes. If you are self-employed, remember to add payable CPP and EI premiums here. The social benefits repayment on EI or OAS also appears here. Finally, provincial taxes computed on provincial tax forms will be added.  

    Now, onto the top of the last page of the T1 General form. This is where you enter the income tax deducted from your various slips and claim your final set of applicable tax credits, overpayments and rebates. This can include some provisions that really add up to reduce taxes or provide a bigger refund, including overpayments to the CPP and EI, the Canada Workers Benefit, the Canada Training Credit, the eligible educator school supply tax credit, and so on. Seniors, self-employed and other Canadians subject to making quarterly tax installments will also want to record the money paid to reduce their tax bill. Finally, available refundable provincial tax credits are reported.

    If your total credits exceed taxes payable, you may receive a tax refund. Specifically, if you have a negative amount, enter it where indicates you have a refund. If you have a positive amount, enter it on the line that indicates you have a balance owing.

    Once you file your tax return, if you owe any taxes, you can pay online using online banking, credit card or pre-authorized debit.

    If you’re expecting a tax refund, you should receive it within two weeks if you filed online, eight weeks if you filed by paper, or 16 weeks if you live outside of Canada or file a non-resident tax return. If you sign up for direct deposit, you will receive your refund faster than waiting for a cheque in the mail.

    Obviously, every Canadian’s tax situation is unique to them and to every year they file. So, if you’re ever in doubt, it’s a good idea to seek out a qualified accountant or a tax professional who can verify that your tax return is completed properly. Tax software can double-check for any missing information and catch many errors. But it can’t always apply for new provisions you haven’t told it about or represent you in case you are audited by the CRA.

    Step 7: Review your NOA

    It can take up to two weeks to receive a Notice of Assessment (NOA) if you file electronically. However, it can take up to eight weeks to receive your NOA if you file by paper.

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    Sandy Yong

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  • How to file your taxes online in Canada – MoneySense

    How to file your taxes online in Canada – MoneySense

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    How to use H&R Block online tax software

    Founded in 1955 and with more than 1,000 brick-and-mortar storefronts across the nation, H&R Block is a big name in the tax preparation business in Canada. It offers both full service and DIY filing options, in-person or online. For those wanting to do it themselves, H&R Block offers a variety of packages suitable for all sorts of filings, including those for individuals with income from rental properties, foreign countries, and self-employment or side-gigs. 

    When you’re ready, simply select the H&R Block online tax package that works for you. You can import your slips directly from the CRA, and the software’s SmartSearch feature lets you input all the information from them in one place so you don’t have to jump around. The program automatically scans for credits or deductions you might be able to claim. And should you need assistance, you can purchase live, on-screen expert help. When you’re finished, you can Netfile your return directly to the CRA or Revenu Québec. (Netfile is the electronic tax-filing service of the Government of Canada.)

    H&R Block has a long history and it will appeal to those who value longevity and want the ability to get help, if needed. In addition to in-person offices and phone service, H&R Block also offers paid audit protection and priority support. 

    Cost: Free for a simple return; $19.99 for deluxe (claims and credits); $34.99 for premier (like Deluxe but includes investments, rental and foreign incomes); and $44.99 for Self-Employed.
    Features: SmartSearch for tax slip information; DeductionPro donation calculator; web and mobile access; free filing for those 25 years old and under; additional filing help starting at $39.99; optional paid audit protection and priority support.
    Refund turn-around time: As few as eight days.

    How to use Wealthsimple Tax

    Established in 2012 as SimpleTax and purchased by robo-advisor Wealthsimple in 2019, Wealthsimple Tax offers Canadians a deep portfolio of features and a few interesting extras—at no cost (although you can tip based on your experience). 

    Unlike some other online income tax filers, there are no packages or tiers with Wealthsimple Tax. Its software can handle self-employment, small business and investment property income. All customers have access to any of the features, which include the ability to import previous returns, automatically import and auto-fill CRA slips, search for deductions, calculate how to maximize your RRSP refund, and file using Netfile. Wealthsimple Tax even lets you connect to your cryptocurrency wallet and auto-fill gains or losses. 

    With Wealthsimple Tax, there’s free 24/7 support available through email; it does not currently support questions by phone or chat. Wealthsimple Tax backs up its product with a refund guarantee. If you find a better refund, the company will reimburse you for whatever you paid to file, up to $50.

    Cost: Free (pay as you wish, for real)
    Features: Import slips and auto-fill return; search for deductions; link with crypto wallets; registered retirement savings plan (RRSP) maximizer calculator; 24/7 support; maximum refund guarantee.
    Refund turn-around time: As few as eight days with direct deposit.

    How to use Intuit TurboTax

    TurboTax is a product of Intuit Canada, the financial software company that owns QuickBooks. It follows the online filing model and offers three products (free, Deluxe and Premier), each available with three different tiers of help: full DIY, assist and review with a tax expert, or full service. 

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    Keph Senett

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  • How is passive income taxed in Canada? – MoneySense

    How is passive income taxed in Canada? – MoneySense

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    A corporation’s investment income is generally taxable at between about 47% and about 55%, depending on the corporation’s province of residence. This includes interest, foreign dividends and rental income.

    Canadian dividend income earned by a corporation is generally subject to about 38% tax, although dividends paid between two related corporations may be tax-free (i.e. paying dividends from an operating company to a holding company).

    For a corporation, capital gains are 50% tax-free—just as they are for individuals—such that corporate tax on capital gains ranges from about 23% to about 27%.

    Rental income

    Rental income is fully taxable personally and corporately at regular tax rates. So, this means 31% for an Ontario resident with $100,000 of income, for example, and between 47% and 55% corporately depending on the corporation’s province or territory of residence.

    The caveat is that only net rental income is taxable. A rental property investor can deduct eligible rental expenses including, but not limited to, mortgage interest, property tax, insurance, utilities, condo fees, professional fees, repairs and related costs.

    Income in an RRSP

    Registered retirement savings plan (RRSP) accounts are tax-deferred with tax payable on withdrawals. However, there are tax implications to owning investments in your RRSP and other registered retirement accounts.

    Foreign dividends are generally subject to withholding tax before being paid into your account or an RRSP investment at rates ranging from 15% to 30% (in the case of a mutual fund or ETF). In a taxable account, this withholding tax does not matter as much because you generally claim a foreign tax credit to avoid double taxation. In an RRSP, the foreign withholding tax is a direct reduction in your investment return with no way to recover the tax. This does not mean you should avoid foreign investments in your RRSP. It is simply a cost of diversifying your retirement accounts.

    One exception is U.S. dividends. If you buy U.S. stocks or U.S.-listed ETFs that owned U.S, stocks, there is no withholding tax on dividends paid in your RRSP. If you own an ETF that owns U.S. stocks that trades on a Canadian stock exchange, or you own a Canadian mutual fund that owns U.S. stocks, there will be 15% withholding tax on the dividends of the underlying stocks before they are paid into the fund.

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    Jason Heath, CFP

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  • Are You About to Miss the Tax-Filing Deadline? File an Extension — Then Use NCFilesFree.org

    Are You About to Miss the Tax-Filing Deadline? File an Extension — Then Use NCFilesFree.org

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    Press Release
    –


    updated: Apr 17, 2017


    Durham, NC, April 17, 2017 (Newswire.com)
    –
     Those struggling to file their federal and state income taxes on time may request an extension through this yearʼs deadline on April 18.

    The Benefit Bank® of North Carolina (TBB™-NC) offers free, easy-to-use online tax assistance at NCFilesFree.org. There are no additional fees or charges of any kind. TBB-NC is managed by MDC, a Durham-based nonprofit organization dedicated to eliminating barriers that separate people and communities from opportunity.

    Most volunteer sites shut down after April 18. It can be difficult to obtain free tax assistance after that date, but you can use NCFilesFree.org until your extension ends.

    Ralph Gildehaus, Senior Program Director.MDC

    “Many wait to file right at the tax deadline and extensions must also be filed by April 18,” says MDC Senior Program Director, Ralph Gildehaus. Taxpayers can visit IRS.gov and dor.state.nc.us and follow the steps to file an automatic six-month extension to complete their taxes by October 18. “Remember, if you owe money, you still need to pay the estimated taxes to avoid tax penalties and interest.”

    “Most volunteer sites shut down after April 18,” Gildehaus says. “It can be difficult to obtain free tax assistance after that date, but you can use NCFilesFree.org until your extension ends. You can even use this site to prepare up to three prior years of back taxes.”

    The system is designed to maximize refunds and help families claim the Earned Income Tax Credit (EITC). To qualify to use NCFilesFree.org, a household income must be less than $95,000 (filing jointly) or $65,000, (filing single). Users can also arrange for refunds to be directly deposited into their bank accounts.

    Other services offered by The Benefit Bank® of North Carolina include options to complete the Free Application for Federal Student Aid (FAFSA) and voter registration. Users can also screen for potential eligibility for work support programs, such as nutrition and health assistance.

    To learn more about free online tax assistance through The Benefit Bank® of North Carolina go to NCFilesFree.org. You may also call 2-1-1 for information about free tax assistance services that may be available in your community.

    Source: The Benefit Bank® of North Carolina

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  • Free Online Tax Assistance Offered Through NCFilesFree.org

    Free Online Tax Assistance Offered Through NCFilesFree.org

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    Press Release
    –


    updated: Apr 14, 2017


    Durham, NC, April 14, 2017 (Newswire.com)
    –
    ​While the tax-filing deadline is just days away, there’s no need to panic. Taxpayers can still file their federal and state income tax returns — for free — online through April 18. They can even request extensions through that date.

    Taxpayers can access an easy-to-use free tax assistance service online at NCFilesFree.org. The system is designed to maximize refunds and help families claim the Earned Income Tax Credit (EITC). The service, offered by The Benefit Bank® of North Carolina, is available to low- and moderate-income taxpayers through the Durham-based nonprofit organization, MDC. There are no fees or charges of any kind.

    Ralph Gildehaus, MDC Senior Program Director, says most people either file their taxes in January or right before the April deadline. “If you need to file an extension, be sure to do so by April 18,” Gildehaus says. “After that point, almost all of the volunteer tax sites shut down, but you can use NCFilesFree.org up until your extension expires on October 18.”

    What you need to file:

    • Government issued ID
    • Social Security number(s)
    • W2ʼs, 1099ʼs, 1098ʼs
    • Previous yearʼs tax return (if available)
    • Information about other income
    • Deduction and credit information
    • Health coverage information (including 1095-A, 1095-B, 1095-C, if applicable)

    To qualify for using The Benefit Bank for taxes, gross household incomes (filing jointly) must be less than $95,000, or less than $65,000 (filing single).

    For more information, go to NCFilesFree.org. You may also call 2-1-1 for information about other free tax assistance services that may be available in your community.

    Source: The Benefit Bank® of North Carolina

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