Frequently Asked Questions About Canadian Tax

A checklist for your Canadian personal/corporate tax

 
1. What are the personal income tax rates?
TAXIBLE INCOME Combined federal
& provincial rate
Capital Gains Canadian dividend
Non-eligible
Canadian dividend
Eligible
first $35,716 20.06% 10.03% 3.16% (14.36%)
over $35,716 up to $40,726 22.70% 11.35% 6.46% (10.54%)
over $40,726 up to $71,433 29.70% 14.85% 15.21% (0.38%)
over $71,433 up to $81,452 32.50% 16.25% 18.71% 3.68%
over $81,452 up to $82,014 36.50% 18.25% 23.71% 9.48%
over $82,014 up to $99,588 38.29% 19.15% 25.95% 12.07%
over $99,588 up to $126,264 40.70% 20.35% 28.96% 15.56%
over $126,264 43.70% 21.85% 32.71% 19.91%
 
2. Why should I file a tax return if I don’t have income or have to pay tax?

Even if you don’t have income or have to pay tax, it will often be to your advantage to still file a tax return for reasons such as:

  • You may get a refund for the tax that was withheld from you come.
  • There are federal and provincial refundable tax credits which are payable to you even if you have no earnings and have paid no tax. This includes the Working Income Tax Benefit.
  • You may want to apply for the GST credit and/or the Canada Child Tax Benefit.
  • You have unused tuition, education and textbook amounts that you want to carry forward to use in future years.
  • You have non-capital losses that you want to carry back to previous years or carry forward to use in future years.
 
3. What are the deadlines for taxes?
  • RRSP contribution – 60 days after the end of the year
  • Personal tax returns – April 30
  • Self employed personal tax returns – June 15
  • Tax owing for all taxpayers – April 30
 
4. When are installment payments to CRA due?

Installment payments are due March 15, June 15, September 15, and December 15.

 
5. What do I need to bring in to your office for filing my personal tax return?

Please see the Personal Tax Checklist for a detailed list.

 
6. What income do I need to report for tax purposes?

Canadian residents are required to report their income from all sources including any amounts earned outside of Canada.

See the Personal Tax Checklist for detailed list of income that should be included.

 
7. What are tax credits?

Tax credits reduce the tax owing amount. Because it does not reduce the taxable income, tax credits do not affect the rate the taxpayer pays. There are Federal and Provincial tax credits available to Canadian tax filers.

 
8. Who qualifies for Canada Child Tax Benefits (CCTB)?

The CCTB is a tax-free monthly payment made to eligible families to help them with the cost of raising children under the age of 18.

 
9. Who qualifies for the Universal Child Care Benefit (UCCB)?

The UCCB is a monthly payment made to Canadian families with children under the age of 6 years to help them balance work and family life by providing direct financial support of $100 a month.

 
10. Who qualifies for the Working Income Tax Benefit (WITB)?

The WITB is a refundable tax credit intended to provide tax relief for eligible working low income individuals and families who are already in the workforce and to encourage other Canadians to enter the workforce.

 
11. If I operate my business out of my home, can I deduct home expenses?

Yes you can deduct a portion of your household expenses such as mortgage interest, insurance, heat and electricity.

See the Self Employed Income Checklist for a detailed list as to which expenses are deductible for your situation.

 
12. If I use my personal vehicle to earning my self-employed income, can I deduct vehicle expenses?

Yes you can deduct a portion of your vehicle expenses such as gas, financing interest, insurance, leasing cost and repairs.

See the Self Employed Income Checklist for a detailed list as to which expenses are deductible for your situation.

 
13. Should I put money into a Tax-Free Savings Account (TFSA)?

A TFSA is a new way for residents of Canada to set money aside, tax-free, throughout their lifetimes. Contributions to a TFSA and the interest on money borrowed to invest in a TFSA are not tax deductible. The income generated in the TFSA is tax-free when withdrawn. The maximum amount that can be contributed to a TFSA per year is $5,000.

 
14. Can I deduct expenses that I incurred to earn my employment income?

Yes, you can deduct certain expenses, as long as you under your contract of employment were required to pay for your own expenses. A signed T2200 Declaration of Conditions of Employment from your employer is required.

Qualifying commission employees can also deduct certain expenses.

See the Employee Expenses Checklist for a detailed list as to which expenses are deductible for your situation.

 
15. Can I deduct my vehicle expenses related to traveling to and from my normal place of work?

No, CRA considers travel to and from your normal place of work as a personal expense and therefore not deductible for tax purposes.

 
16. Can I deduct the Medical Services Plan (MSP) Premiums that I make as medical expenses?

No, you can not deduct medical premiums paid to a public medical insurance plan. However premiums paid to private health services plans are deductible as medical expenses.

 
17. As part of my business, I have a membership at a golf club and I often take clients’’ out to play a round of golf? Can I deduct these as a business expense?

No, CRA does not allow a deduction for any expenses incurred in respect of membership or green fees at a golf club.

 
18. Can RRSP losses be claimed on my tax return?

No, losses in an RRSP cannot be claimed as a deduction. However, because you have a lower amount of funds for withdrawal from, you will be taxed less.

 
19. I have rental income from a recently purchased property. Can I deduct the legal fees I paid in connection to the purchase of the property against my rental income?

No, this expense would be considered capital in nature and would therefore be added to the capital cost of the property and deducted over a period of several years.

See the Rental Income Checklist for a detailed list as to which expenses are deductible.

 
20. I lose money on my rental property because I rent it to relative at a lower rate. Can I claim the rental loss?

No, if you are losing money on your rental property because you are renting it at a lower rate to a relative than you would to other tenants, then you cannot claim the loss.

If the rental income consistently does not cover expenses, then a reasonable expectation of profit does not exist and rental losses are deemed non-deductible.

 
21. I have an incorporated company and require year end financial statement and a corporate tax return to be done, what do I need to bring in?

Please see the Year End Checklist for a detailed list.

 
 

About Us

Sandhu & Company, a CPA (Chartered Professional Accountants) accounting firm, was established in 1998 to provide full service accounting and taxation services to local businesses. Our practice is focused on the needs of the small business corporation and owner-manager businesses.

Sandhu & Company, CPA is committed to the highest level of integrity, quality and professionalism and provides clients’ with solutions in the area of accounting, audit and tax services.

Sandhu & Company, CPA is a progressively growing Vancouver accounting firm. We continue to grow due to the referrals we receive through word of mouth from our existing clients’.

Ease the unnecessary stress that comes with filing your taxes by leaving it in the hands of the Vancouver tax team at Sandhu & Company, CPA. Our Vancouver accountants offer business solutions targeted at making your business successful by staying competitive. Be successful having our trained professional accountants by your side.

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SANDHU & COMPANY, CPA
Chartered Professional Accountants

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Vancouver Office
101, 2529 Kingsway, Vancouver, BC V5R 5H3
Surrey Office - by appointment only
Suite 103 - 12030 80th Ave. Surrey, BC V3W 3M1

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Tel: 604-322-7576
Email: info@sandhutax.com
Website: www.sandhutax.com

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