All citizens and residents in Canada are required to file an income tax return. There is no age restriction or exception. In addition, any person residing in Canada for more than 183 days is deemed to be a Canadian resident for the purposes of the Income Tax Act.
In Quebec, if you are a resident, as defined in the Taxation Act, you must pay tax on your income from all sources.
After age 18, you can no longer claim your kid as dependent, even if you choose to continue to support them.
However, when your kid becomes an adult and has a recognized disability, you can make a request Credit to the Canada Caregiver. Under one condition: Your kids must live with you under the same roof.
If your kid is a minor, then your kid still depends on you and does not have to pay tax. Therefore, your kid is not required to file a tax return.
However, if tax has been withheld at source on earned income, it is to their advantage to file a tax return in order to recover the deduction in the form of a refund.
When your kid becomes an adult, they must file their own tax return. Not only could they get back the paid taxes, they could as well be eligible for the GST/HST credit and the solidarity tax credit.
Briefly and without getting into too much details nor into specific cases:
- A self-employed person is an individual who works for their own interest to generate a profit. A self-employed person is autonomous in the choice of their clients, in the way of carrying out the work requested by the client and in organizing their work schedules.
- However, an employee is a person who works for a company in exchange for a salary. Following a signed contract between both parties, an employee performs their work under the control of an employer for a certain period of time mentioned on the contract.
If your self-employment brings you a yearly income of $30,000 or more, you must register for the GST/QST.
Once registered, you are responsible for filing a GST and QST return. The return can be filled monthly, quarterly or annually. You can choose the frequency of your tax return submission when you register.
The deadline for filing your income tax return to the various tax authorities (Revenue Canada and Revenu Québec) is April 30 of each year.
Any tax balance must be paid by April 30, otherwise you will face penalties and interest charges.
When you file your tax return online, the process of preparing your return is faster, since certain steps are eliminated, such as mailing and manual processing of documents.
And surely, when you get a refund, you will receive it quicker.
If you or your tax preparer (Wirelesstax) use the electronic tax return transmission (EFILE), you do not need to send any statement, receipt or any other supporting documentation.
However, they must be retained in order to be provided when requested.
Yes, you must keep all your records, receipts and any related supporting documents in order to be able to provide them upon request.
You always should keep them for six years after the taxation year to which they relate.
Most individuals pay their annual taxes through source deductions from their income.
However, if the tax you have to pay on some of your income is not withheld at source, you may have to pay it in instalments, for instance, if you are self-employed or retired.
You must pay instalments if you meet the following two conditions:
- The net tax you estimated to pay for the current year exceeds 1 800 $;
- The net tax that you should pay exceeded 1 800 $ for either of the previous two years.
Medical expenses may entitle you to claim a non-refundable tax credit if you have paid medical expenses that exceed 3% of your net income. Medical expenses must have been paid in a 12-month period for:
- Yourself;
- Your spouse
- A person who has been dependent on you (your kid)
It is usually more advantageous for this credit to be claimed by the spouse with the lowest income.
Yes, your charitable donations boost your chances to claim tax credits. It’s important that you have a receipt from the charitable organization and that the organization is registered with the tax authorities.
The RRSP (Registered Retirement Savings Plan) is a way to save money throughout your professional career, in order to reinforce your retirement income.
Alos, the RRSP allows its subscribers to postpone their taxes payment until later, and to deduct the amount of their contribution from their income.
Before subscribing to an RRSP, you must look at the maximum allowed amount and the deadline to subscribe to the correct tax year (deadline is usually around February 28 of the year following the tax year in question).
The (TFSA) program helps adults to set aside tax-free money during their lifetime. To benefit from this program you just need to be 18 years old or older and to hold a valid social insurance number.
It’s important to clarify that TFSA contributions are not tax deductible.
Any amount you contribute and any income earned in the account are often not taxable, even when withdrawn.
Administrative expenses, other TFSA expenses and the interest paid on money borrowed to contribute to a TFSA are not tax deductible.
A newcomer is a person who has recently established a residency in Canada. These may include, but are not limited to:
- A refugee;
- A person who has applied for and obtained a permanent resident status from Immigration and Citizenship Canada;
- An individual who has received an official approval from immigration and citizenship canada to remain in Canada;
- A person who previously resided in another province or territory in Canada.
As a newcomer to Canada, you will need a Social Insurance Number (SIN).
There are two conditions to be eligible for the telework (working from home) deductions :
- Having been working from home due to pandemic (COVID-19) for more than 50% of the time over a continuous four-week period.
- Not receiving any refund from your employer.
If you are eligible, you can decide between these two methods:
- Fixed-rate method: It allows you to deduct 2$ per day of work for a maximum of 200 days, which is equivalent to a total deduction of 400$.
Employees will not have to obtain forms from their employer to claim a telework tax credit. No supporting documents will be required. - Detailed method: This method allows people who work from home to claim a reasonable proportion of the costs they have paid for the use of workspace in their homes.
You will also need to provide details of your expenses.
Be careful, not all expenses are eligible. The eligible expenses, most likely, are:
Eligible Expenditures :
- Provision of office space
- Electricity
- Heating
- Water
- Internet access fees
- Maintenance Costs
- Minor Repair
- Rent
IMPORTANT: Keep your invoices and supporting documents for six years. Tax authorities may ask for them.
We ask you to try an online simulation. This exercise will help you determine the method of calculation that will be most beneficial to you.
Click on the links below to perform your simulation:
Revenu Québec: Choose the most advantageous method for calculating telework expenses, Calculation tools, Finance Department (gouv.qc.ca)
http://www.budget.finances.gouv.qc.ca/budget/outils/teletravail-fr.asp
Canada Revenue Agency: Working from home expenses for employees – Canada.ca.
Compare the 2 deduction methods – Working from home expenses for employees – Canada.ca