Filing your taxes for the first time? Here’s what you should know about where to start.
You’ve made the journey and are now calling Canada “home”. Cold winters, maple syrup and people who say “sorry” pretty often, are just some of the things that you’re probably getting used to. Filing a tax return is also part of the complete Canadian experience, so whether you’re a newcomer this year or have been living in our home and native land for awhile now, we’ve come up with some important things to remember when it comes to our tax system.
- Canada’s tax system is regulated by the Canada Revenue Agency, also called the CRA.
- The deadline for filing your personal tax return is April 30.
- If you are self-employed, the deadline for filing is June 15.
- If you don’t owe tax, there is no penalty for filing late.
- If you do owe tax, the late-filing penalty is five per cent plus one per cent interest per month on the outstanding balance, up to a maximum of 12 months.
- A Social Insurance Number (SIN) is used to identify you for income tax and benefits purposes. If you have requested a SIN but do not receive it before the filing deadline, you can leave that field blank to avoid late-filing penalties, as long as you attach a note explaining why you have not included it.
For Newcomers and Immigrants to Canada:
- Do I need to be a Canadian citizen to file my taxes? No! Canadian citizenship is not a requirement to file taxes. The Canadian tax system is based on residency.
- How do I know if I’m considered a resident? Residency is established through residential ties in Canada. Examples of residential ties include having a home in Canada, documents like a provincial driver’s license or bank account, or having a spouse, common-law partner or dependant who moves to Canada to live with you. If you’re unsure whether or not your considered a resident for income tax purposes, you can submit Form NR74, Determination of Residency Status (Entering Canada) to the CRA to find out.
- I don’t have any income to declare, do I still need to file a tax return? Even if you have little to no income, you should still file a tax return. You could be eligible for certain benefits like the quarterly GST/HST credit, or the Canada Child Benefit. The CRA needs a current tax return to see whether you qualify for any of these or other benefits.
I’ve brought some assets into the country. How should I declare them? If you’re bringing any kind of assets to Canada, make sure to establish their fair market value on the day you arrive. Your capital gains or losses will be calculated based on this amount, if and when you sell them.
Filing your first Canadian tax return can seem intimidating, but luckily we Canadians aren’t only friendly, we’re also helpful. The CRA has lots of resources for first-time filers, and offers a Newcomers to Canada guide to help you get started.
We understand that moving to a new country is a hectic time, but filing your taxes and establishing your history with the CRA right away is an important step. Not only does it make your Canadian experience that much more official, it also means you receive all the benefits and credits available for choosing to live in Canada.
Have questions? Visit a tax expert at an H&R Block office near you, or do it yourself with our online tax software.