The deadline for most individuals to file their income tax return is April 30th of each year. If you or your spouse or common-law partner is self-employed, the deadline is June 15th, but any taxes owing are still due by April 30th. When a due date falls on a Saturday, Sunday or public holiday recognized by the CRA, your return is considered on time if the CRA receives it or if it is postmarked on or before the next business day.
If you file your tax return late and you owe taxes, you may be charged a late-filing penalty. The penalty is 5% of your balance owing plus 1% for each full month your return is late, up to a maximum of 12 months.
A tax deduction reduces your taxable income, which in turn results in tax owing on a lower income. A tax credit directly reduces the amount of tax you owe.
Common tax deductions include:
Common tax credits include:
The deadline to contribute to your RRSP for a given tax year is 60 days after the end of that year, typically March 1st or 2nd.
You can contribute up to 18% of your earned income from the previous year, up to a maximum dollar limit, plus any unused contribution room from previous years. The CRA provides your exact contribution limit on your Notice of Assessment.
You can contribute up to unused contribution room from the previous year, if any, and a maximum of $8000 for that particular year.
The deadline to contribute to your FHSA account is December 31.
A TFSA (Tax-Free Savings Account) allows you to contribute money and earn investment income tax-free. Contributions are not tax-deductible, but withdrawals are not taxed.
You can pay your taxes online through your financial institution, by credit card, Interac e-Transfer, pre-authorized debit, or by mail using a cheque or money order.
If you file electronically and choose direct deposit, you can expect to receive your refund within 2 weeks. If you file a paper return, it can take up to 8 weeks.
You can check the status of your refund online using the CRA’s My Account service, or by calling the CRA’s automated Tax Information Phone Service (TIPS).
If you realize you made a mistake on your tax return, you can request an adjustment using the CRA’s online service or by sending a completed T1-ADJ form by mail.
If you are moving to or from Canada, you may have specific tax obligations, such as declaring your residency status, reporting worldwide income, and understanding departure and arrival tax rules. Consult with a tax professional for personalized advice.
You can contact the CRA by calling their general inquiries line at 1-800-959-8281, or you can visit their website at www.canada.ca/en/revenue-agency for more information and online services.
The deadline for filing a corporate income tax return (T2) is six months after the end of the corporation's fiscal year.
If your corporation files its tax return late, it may be subject to late-filing penalties and interest on any outstanding balance. The penalty is usually 5% of the unpaid tax, plus 1% of the unpaid tax for each full month the return is late, up to a maximum of 12 months.
Corporate tax returns must be filed electronically using the CRA's certified software unless the corporation is exempt from mandatory electronic filing.
Corporate tax rates vary depending on the type of corporation (e.g., small business, general corporation) and the province or territory in which the corporation operates. The federal small business tax rate is 9% on the first $500,000 of active business income, with the general corporate tax rate being 15%.
Corporations can pay their taxes online through their financial institution, by mail, or through pre-authorized debit arrangements. Payments are typically due two months after the end of the fiscal year for most corporations, or three months for certain eligible small CCPCs (Canadian-Controlled Private Corporations).
If your corporation's taxable revenues exceed $30,000 in a calendar quarter or over four consecutive calendar quarters, you must register for a GST/HST account.
Corporations with employees must deduct and remit payroll deductions, including Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and income tax, to the CRA regularly.
Corporations must keep detailed records of all financial transactions, including receipts, invoices, bank statements, and payroll records, for at least six years after the end of the tax year.
Yes, corporations are required to prepare financial statements each fiscal year. These statements must be included with the corporate tax return and typically consist of a balance sheet, income statement, and statement of retained earnings.
Dividends paid by a corporation are subject to different tax treatment depending on whether they are eligible or non-eligible dividends. Shareholders must include dividends in their personal income tax returns, and a dividend tax credit may apply.
The sale of corporate assets can result in capital gains or losses. The tax treatment will depend on the type of asset sold and the corporation's financial situation. Before June 25,2024, Half of the capital gain is typically taxable. After June 25, 2024, two thirds of the capital gains are taxable.
Corporations can contact the CRA's business inquiries line at 1-800-959-5525 or visit the CRA website at www.canada.ca/en/revenue-agency for more information and online services.