Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
Starting a business, a new job, or a freelancer journey are some of the most exciting moments of our lives. These milestones will fill you with the determination to accomplish one task after another to ensure that you succeed and do everything right in your chosen career. Aside from your duties at work, there is another task you need to be familiar with—paying taxes. Let us help you understand the basics of income tax returns, so you won’t get lost or cram filing taxes when tax season comes.
Tax System Basics
The permanent establishment taking care of income tax returns and average income tax returns (in Canada) is the Canada Revenue Agency (CRA). If you live in Quebec, familiarize yourself with the Revenu Québec as you will pay your taxes there. Working individuals and companies are both required to pay Canadian tax returns yearly. While some corporations deduct taxes monthly, the CRA sets a yearly deadline for taxpayers to pay their dues.
Income Tax Return (Canada) Defined
So, what is an income tax return? An income tax return is an amount you need to pay the CRA based on your or your business’s yearly income from January 1 to December 31. The tax deductions are made monthly, and you can make payments monthly too. Yet, the CRA sets a deadline yearly for you or your company to pay your owed taxes. It is essential to pay on or before the deadline to avoid any penalties.
Who Needs To File An Income Tax Return?
You will make an income declaration to tax authorities by completing and filing the TD-1 form. The tax rate and tax deduction will be based on your declared income, and generally, anybody residing in Canada who is working and earning should file an income tax return. Yet, non-residents, self-employed, and deceased people still have taxes they need to pay, and the rules and tax payment deadlines differ with each group classification.
Dates To Remember: File Your Taxes On Time
There will be interest and penalties if you do not pay your taxes on time, so you will be fined if there is no emergency or acceptable reason for late filing. Skip this hassle of getting a late filing penalty by remembering these deadlines:
- April 30: For permanent residents, and for all workers and companies
- April 30 or six months after death: For deceased individuals
- June 30: Tax payment for non-residents
- June 15: Self-employed individuals and their spouses or common law partners
Prepare For Tax Filing
These are the ways to ensure you are ready for the filing deadline, so you won’t run into any issues filing your income tax returns or getting refunds.
- Get copies, accomplish and file T4 and T4A tax slips.
- Check out your CRA information, and make sure it is updated.
- Remember the tax filing deadlines and pay your tax obligations ahead of time.
- Check out for any update in filing forms and paying, especially during Covid-19.
- File, pay and file for a tax refund using a convenient method (via income tax returns, Canada online services or by mail)
- Recheck payment status
Track And Pay With Unloop!
Now that you are familiar with the basic income tax return (Canada) due dates and other basic knowledge, you may have realized the value of tracking your personal and company income. As a startup business owner or a rookie freelancer, it is essential to keep an eye on your business while not forgetting your taxes.
So, let us and our trained bookkeepers and accountants here at Unloop handle your income and expense tracking for you. We’ll track and prepare all the details needed for tax season using reliable accounting and tax preparation software like Quickbooks, Hubdoc, and A2X. With this assistance, you can focus on running and growing your business. You can forget about notices from the CRA regarding unpaid taxes, inaccurate declarations, and penalties as with our assistance, you won’t even see them.