Dealing with taxes can be complicated and confusing for many people—especially adults who have started paying their taxes recently or immigrants who might have just moved to Canada.
Therefore, it is expected that many of you might dwell upon the question, “what do I need to file my taxes in Canada?” Our best recommendation is to get in touch with an experienced lawyer
When we did our research, a lot of people asked why it is important to pay taxes. The answer is simple: you must pay taxes for the betterment of your country.
With our tax money, the government is able to build and develop the infrastructure of the country, such as the roads.
The tax money is also used to pay the salary of government employees and build structures like parks and libraries.
Overall, tax money goes to many places and will benefit the residents of the country in the end. In this piece, we will deliberate over everything you need to know about filing taxes in Canada.
Once you understand the basics and understand the rulings of tax laws in Canada, filing taxes will become easy.
What Do I Require to File My Taxes In Canada?
There are three primary types of taxes in Canada: Income Taxes, Property Taxes, and Sales Taxes. Most of you might have to pay for income and sales taxes.
The list of things you will need before you file your taxes is as follows:
- Social insurance number
- Income RL-slips and T-slips
- Any other income records
Once you have all your mandatory documents, you can go ahead and file your taxes easily. You can file online, by paper, or simply by mailing your tax return.
What Papers Do I Need to File My Taxes In Canada?
Now, when you decide to go file your taxes, you will need to show authentic and valid documents. These documents will mainly be proof of your income sources and records.
You will also need a few other types of documents. To make it easier on you, we have created a list of the most common type of documents that are usually asked for when one goes to file their taxes in Canada.
- Documents of all personal data
- Forms W-2
- Unemployment (1099-G)
- Self-employment income statement
- Retirement Income
- Rental Income
- Records of Savings and Investments.
- Any other income and losses records.
What Can I Claim On My Taxes In Canada?
In the list below, we have mentioned some of the expenses on which you might owe taxes and might even be able to maximize your refund based on these credits, tax deductions for nurses Canada, etc.
- Vehicle Expenses
- Office Expenses
- Staff Expenses
- Family Benefits
- Childcare Expenses
- Medical Expenses
- Travel Expenses
- Clothing Expenses
- Trade Expenses
- Union dues
- Various employment expenses
- RRSP – Registered Retirement Savings Plan Contributions
Tax Credits And Deductions
Knowing what all falls under the category of tax credits and deductions can be confusing, especially if you do not stay updated with policy changes.
Thus, we created this list to benefit you, inform you about these tax credits and deductions you must be aware of.
- Amount based on age
- First-time house buyer
- Income tax deductions Canada
- Charitable donations
- Union dues
- Medical expenses
- Student loan interest
- Tuition expenses
- Child care deduction
- Canada child benefit
- Child disability benefit
How Much Tax Do I Need To Pay In Canada?
There are fixed rules and policies for how much tax you need to pay based on your age and income rate. To give you an idea, we have drawn a chart for the Federal Income tax of Canada based on the data of 2020.
| Federal Income Tax | |
| Federal Income Tax Brackets (2020) | Federal Income Tax Rates (2020) |
| More than $214, 368 | 33% |
| $214, 368 – $150, 473 | 29% |
| $150, 473 – $97, 069 | 26% |
| $97, 069 – $48, 535 | 20.5% |
| Less than or equal to $48, 535 | 15% |
It must be noted that the tax rate changes every year based on the economic situation of the country, such as inflation.
What Is The Maximum Tax Refund You Can Get In Canada?
If you are a single individual and earn a net income below $24, 573 then you will get a maximum tax refund of $1381. If you live with a family and a provider for them and earn a net income below $37, 173 then you will get a maximum refund of $2379.
What Should Be My Income Threshold To Start Filing for Taxes?
As of 2020, for those of you who are under the age of 65 and earn a minimum of $12 400 annually, you will need to start filing for taxes. If you earn below that amount, you are not bound to file for taxes in Canada.
Child Tax For Canadian Parents
As of 2018, the Liberal government of Canada has changed the policy regarding child tax. The tax rate has increased that you, as a Canadian parent, are actually liable and eligible to receive.
If you were not aware before, you know now. Thus, make sure you enroll for this and get all the benefits you deserve.
In order to help you further, below, we have discussed how you and all Canadian parents can receive child tax benefits.
- You must make sure you are eligible. To be an eligible candidate, your child must be a minor, and you should be living with them. You also should be the one who is responsible for your child’s upbringing and care. You must be a resident of Canada.
- Your common-law partner or spouse needs to meet specific criteria too. For instance, they must be one of the following: a Canadian citizen, a protected person, a permanent resident, an Indian within the meaning of the Indian Act, or a temporary resident who has been living in Canada for the last 18 months and has the valid permit.
- It is important that the correct and the parent with more advantages apply.
- It would be best and help you further if you used the CRA (Canada Revenue Agency) login to apply.
- Do not forget to click and check the “Benefits and Credits” tab.
- You should also click the link under “Child Information.”
To Sum Up
Paying your taxes is really important and a responsibility as a citizen that you should not overlook. You will get your tax refund accordingly.
We do hope we were able to ease your difficulty over the questions, “what do I need to file my taxes in Canada?” If you still have any confusion, we suggest you contact professionals to help you through this matter.
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