Things You Should Know Before Filing Your Personal Tax Returns

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Things You Should Know Before Filing Your Personal Tax Returns

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It’s that time of the year again. The deadline for filing your tax return is fast approaching. If you intend to file your personal tax return with the Canadian Revenue Agency, the first thing to remember is that the deadline is 30th April for the financial year 2017-18. The deadline for the self-employed, the contractors, and the freelancers is on 15th June. There are unpleasant implications of missing the deadline, and that’s the reason why tax specialists are especially proactive at this time of the year.

The unpleasant implications also apply to any mistakes that have been made during filing of the tax returns. This is something to consider for those intending to file their own tax returns. In this article, we will tell you the important things you must be aware of before filing your personal tax returns.

The Essential

Under this section, we have listed the primary details highly relevant for those who have tax obligations. We also intend to guide those new to the taxation system altogether.

Applying for a Social Insurance Number

It is an unspoken rule in Canada to apply for a Social Insurance Number (SIN) before starting your first job. This unique 9-digit number is primarily allotted by the Canadian Government for the purpose of taxation. Applying for a SIN number is the first step in ensuring you are taxed the correct amount. You can also apply for a SIN number online with the right credentials.

Accounting for the Tax-free Threshold

There is a certain amount you can earn without having to pay taxes for that sum. This is known as the ‘tax-free threshold’ in Canada, where you’re only entitled to pay tax if you cross the tax-free threshold. You can contact tax specialists for details about the latest threshold.

Determining Your Residency

The amount of tax you’re entitled to pay primarily depends on your residency status, and there is often some confusion among some people about the status that applies to them. Different rules apply to residents and non-residents. Learn more about the eligibility and the rules applicable to each category-


  • Those who customarily or normally reside in another country are not considered Canadian residents. Or, those who don’t have residential ties of any significance and reside outside Canada for the entirety of the tax year are also not considered residents. Or, those who haven’t resided in Canada for a minimum of 183 days are not considered to be residents. It’s mandatory for a resident to fulfil these requirements.

  • It’s mandatory to declare all earnings outside Canada in the tax year

  • Non-residents aren’t taxed for their earnings outside Canada, but these earnings affect the tax credits they’re entitled to

  • Non-residents are also eligible for the tax-threshold if a minimum of 90% of their income is earned in Canada

  • Those new to Canada and plan to settle in Canada must disclose the income they have earned up to that point. They won’t be taxed for the same, as they will be considered non-residents for that year


  • Those who customarily and normally reside in Canada are considered residents. Those who are married to Canadian citizens and have applied for a Canadian citizenship are also considered residents. However, those who haven’t thus far filed a return and are working on a temporary working holiday visa must file their tax returns as a ‘non-resident’

  • It is mandatory for residents to disclose their earnings outside Canada

  • Residents are also taxed on the income they earn overseas

Contact a tax specialist if there is still a lingering uncertainty about the criteria applicable to you.

Filing the Form

It’s important to remember that you’re entitled to pay both Federal and Provincial taxes. Those failing to fill the Federal TD1 Form will be left only with the basic personal amount as the employer would deduct the rest as taxes. Those having multiple jobs at the same time can only claim credits for the job that pays higher. And furthermore, those who have multiple employers can only claim personal tax credits through Form TD1 for one employer. It’s also important to know different provincial forms that are applicable to different provinces. For instance, TD1ON is applicable to Ontario while TD1AB is applicable to Alberta.

Claimable Expenses

The Canadian government allows its workforce to claim certain expenses. Here’s a brief list of those applicable expenses:

  • Medical Expenses that occur from hiring the services of a certified practitioner can be claimed. Other expenses that can be claimed also include prescription drugs and medication bills. However, the total expenses must amount a minimum of $2,208 or at least 3% of your total income, whichever is less

  • Moving Expenses or those expenses incurred while moving from one location to another within Canada inside the tax year can also be claimed. To avail moving expenses, it is mandatory for you to start a new business or a new job within 40 kilometres of your new residential location

  • Business Expenses incurred by those who are self-employed can also be claimed, as long as these are expenses you incurred for the purpose of earning business income

  • Common Items such as accounting fees, telephone bills, costs incurred for entertainment and meals, insurance, and motor vehicle expenses can also be claimed

  • Canada Caregiver Credit is a recently introduced tax break that’s applicable from this year. The Canada Caregiver Credit is applicable for those who provide care and sustenance for an infirm family member

To claim the expenses listed above, it’s imperative to have the bills, receipts, and important documents in place. The Canadian Revenue Agency can ask for the receipts for examination purposes.

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The Additional

Under this section, we mention things of secondary importance. The points listed below can be referred to primarily for the purpose of additional tax savings. A tax specialist can help you with more relevant information of this sort.

Reporting Business Activities

Reporting business activities without earning anything is a worthwhile activity. Although you didn’t generate any revenue in the period, we’re sure you incurred expenses regardless. This ‘loss’ could be used to offset the amount of any other income that you generate.

Transferring Tax Credits

Don’t forget that you can transfer tax credits from a family member that doesn’t have any use for them. For instance, if your spouse can’t utilize certain tax credits, these can comfortably be transferred to you. These credits include pension, disability, and age credits. Additionally, tuition and education fees up to the sum of $5000 incurred by a student can also be transferred to the parent.

Claiming a GST/HST Rebate

Claiming a GST/HST rebate relating to the employment expenses that you have incurred is also a certain way to save some of those hard-earned dollars. You could avail the claim by filing Form 370. However, for this claim to be eligible, it’s essential for your employer to not only be a GST/HST registrant but also not be exempt from the GST/HST tax.

Claiming the RRSP Deduction

When contributing to RRSP’s some think of seeking the full RRSP deduction as a standard practice. We urge you to rethink that practice if this has been a year of comparatively lower income. You have the option of utilizing the RRSP deduction for a later year, considering you foresee having a greater income in the following year. Claiming the RRSP deduction for a year with higher income is likely to save you more money in taxes.

Approaching a Tax Specialist

Many have tried handling their tax returns on their own, and many have come to realize the difficulties that arise from attempting that. Even tiny errors can cause great inconvenience to those who try. The complexity of the laws and forms of the taxation system act as another roadblock. And,  corresponding with the Canadian Revenue Agency is also not a cakewalk. Their aggressive tactics have stressed simple, hard-working citizens in the past. And, now we have a better way to go about the return filing process altogether, that is, through the services of a tax specialist, and their tax shelter accountants.

A tax specialist helps you actually understand the agreements that you happen to sign, including the rights and responsibilities that come alongside it. Participating with tax shelter specialists is also the best means to be able to communicate with the Canadian Revenue Agency in a relatively easy manner. A tax specialist will help you file your taxes smoothly and eliminate even the mere possibility of making an error of consequence. Contact us if you need help with filing your tax returns. We, at Altitude Accounting, have a 20-minute, free-of-charge, telephonic consultation waiting for you.