Even though you may think you are not be required to file a tax return it may be advantageous to file if any of the reasons pertain to you:
- Filing a tax return is the simplest way to set up your contribution room for a Tax-Free Savings Account (TFSA). According to the Canada Revenue Agency (CRA) “Individuals who have not previously filed returns, [for example if there was no tax payable] would be permitted to establish their right to contribution room by filing a return for those years or by other means acceptable to the CRA.”
- Information on provincial refundable credits and personal tax credits can be viewed on the Province tax website.
- Seniors who are receiving the GIS (Guaranteed Income Supplement) automatically renews the GIS by filing of their annual income tax return. For more information on the GIS, see the article on GIS information on the senior’s information page.
- Students who have education and textbook amounts or unused tuition that they would like to carry forward to use in the future, also OSAP cannot be processed unless you have your NOA for last year
- The federal government and some provinces have refundable tax credits, which are payable to you even if you have no earnings and have paid no tax. You will receive a cheque for amount of the tax credit.
- For provincial benefit programs to be eligible, or keeping your eligibility you should always have your tax updated. For more information see the Government Programs, Benefits and Services information for your province.
- To carry a non-capital loss back to prior years or carry forward to future tax years.
- To give your retirement fund an early start, you can contribute to an RRSP, up to $2,000 more than your RRSP deduction limit, and wait until a future year to deduct the contribution.
- To receive the refund of tax withheld from income for the year.
- When you have “earned income” for RRSP purposes and even if you don’t currently contribute to an RRSP, you can carry the earned income amounts forward indefinitely.
- To apply for the GST/HST credit:
- If you are 18 years of age or older, you should file a tax return even if you have no income, in order to apply for the GST credit.
- You must be 19 to receive the credit, but if you will be 19 before April 1 of the next year, you should file to apply receive your first GST payment as soon as possible after you turn 19.
- Similar benefits to the GST credit are available in some provinces.
- By filing your tax return, you are automatically applying for these benefits.
- To apply for the Canada Child Benefit: In order to receive or continue to receive Canada Child Benefit (CCB) payments for your children, you and your spouse must both file tax returns.
- CCB payments are non-taxable monthly payments made to eligible families with children under age 18. For more information about these benefits, visit the CRA web site Child and Family Benefits.
- Many provinces and territories also pay benefits to families with children. By applying for the CCB and filing your annual tax returns, you will be eligible to receive these benefits.
- For more information, see the CRA page on provincial and territorial child benefit and credit programs.
If you have taxable income or have earnings on which you must pay CPP contributions you are required to file a tax return. Worldwide income must be reported on your income tax form. If your income exceeds the basic personal exception you will usually have to pay income tax. The table of non-refundable tax credits includes the amount of the federal and province and territorial basic personal exemption and other tax credits. If you have net income in excess of $3,500 for self employment income or pensionable employment income, you may have to remit CPP contributions.
You may have to file a tax return if any of the following are applicable to you:
- Canada Revenue Agency (CRA) requested you file a tax return.
- You claimed a capital gains reserve on your previous year’s tax return.
- You have not repaid the entire amount withdrawn amounts from your RRSP under the Home Buyers’ Plan or the Lifelong Learning Plan.
- You have sold capital property (for example real estate or investments) during the current tax year.
Additional information tax information may be found on the Canada Revenue Agency website or you can contact Budget Accounting at (905) 508-5007.