Filing Your First Canadian Tax Return: What You Need to Know

One of the early signs of spring in Canada is tax season! And you’ve got to get ready to file your taxes in Canada for the first time. There are so many pieces to keep track of: "What form am I supposed to fill out? What if I worked in multiple jobs? If I make a mistake, will the government come after me?"

As a newcomer, filing your income tax return for the first time in Canada may be intimidating. You're not alone if you feel this way. Many people dread "tax season."

If you are a newcomer to Canada and you are filing your income taxes for the first time, these tips can help you understand the Canadian filing process.

Your first time filing a tax return: Getting Ready

The first few steps for everyone, whether it’s your first time filing a tax return or not, will involve gathering paperwork and information. You may already have some of the required documentation on hand, but there will be some you’ll have to ask others to help you locate.

Thorough preparation is the key to making this process run smoothly.

Step 1: Determine your status- Are you a resident of Canada?

If you're a resident of Canada for income tax purposes, you'll need to file tax returns for any tax year in which you have to pay taxes.

Federal and provincial personal income tax returns in Canada are administrated by the Canada Revenue Agency (CRA). If you are a resident of Quebec, you need to file a separate provincial personal tax return.

You become a resident of Canada for income tax purposes when you establish significant residential ties in Canada. These include you have:

• A home in Canada
• A spouse or common-law partner in Canada
• Dependents in Canada

According to the CRA, you usually establish residential ties on the date you arrive in Canada.

Step 2: Do you have to file a tax return?

You may have to file a personal income tax return even if you've only been in Canada for part of the year.

According to the Canada Revenue Agency, everyone in Canada should file their taxes, even if they haven’t made any income, so they can get benefits and credits they might be eligible to receive.

File a return if you:

• have to pay tax for the year
• want to claim a refund
• want to get benefits and credit payments

Step 3: Gather your tax information

Here's what you'll need to file your tax return. First, you’ll need to provide basic information, such as your name and address. Among others, you will also need the following information.

• Social Insurance Number (SIN)

A SIN is a nine-digit number that's used to access government programs and benefits. Your SIN is not the same as a temporary tax number (TTN) or an individual tax number (ITN).

• Information slips

If you are employed in Canada at any time during the tax year, your employer will issue you a T4 slip. This slip outlines your total remuneration and deductions for the year (such as EI, CPP, and income tax withheld). If you have investment income, you may receive a T5 slip and or a T3 slip.

• Business receipts

If you are self-employed, you will need to keep business receipts and invoices to accurately report your income and claim deductions. It is important to keep these receipts in case CRA has any follow-up questions.

• Childcare receipts

These are receipts for childcare expenses incurred to have someone look after an eligible child so that you can work or study.

• Dependant's details

If you have dependents, such as a spouse, children, or elderly parents, you'll need to provide information details about them in your tax return. You may be eligible for certain tax credits.

What forms do you need?

There are several different types of forms you will need to show your income earned during the year. This table is an overview of these forms and what they’re used for.

Along with the above forms, you’ll need to provide all documentation of any small business income earned, including copies of invoices. You’ll also have to provide details of the costs related to the small business (receipts for the entire year) and any calculations you’ve made (i.e. business use of your home).

Step 4: Figure out the deadline

Unless you're self-employed, you must file your tax return for any tax year by April 30 of the following year. If April 30 falls on a Saturday, Sunday, or holiday that year, returns will be considered filed on time if the CRA receives them or they are postmarked on the first business day following April 30. This means for the 2023 personal tax return, you need to file your return on or before May 1, 2024.

If you're self-employed, the due date for your personal return is June 15 of the following year. But if you owe any taxes for the tax year, that amount must be paid by April 30.

After these dates, the CRA begins calculating interest on any amounts owing, so it’s important to file your taxes on time to avoid any interest penalties (which are non-deductible on future tax returns).

If your taxes are straightforward (say you have some employment income, a few deductions, and RRSP contributions), you should look at filing your return in February or March. You could even get away with April.

But as a general rule of thumb, you should aim to give yourself some time before the deadline, just in case you need to call CRA with questions about your tax return. Since CRA is extremely busy during tax season, you may not get through to them right away.

The best source of information for CRA tax filing deadlines is the CRA website, especially if you’re looking for due dates and payment dates.

Step 5: Choose what method you’ll use

There are three primary ways that Canadians choose to file their income tax returns.

• Tax preparation professional 
• Online software
• Go solo – fill out paper forms by hand and look for resources when questions and obstacles make an appearance.

First time filing a tax return: Filling out the forms

Once the initial steps are complete, the next phase of the plan for your first time filing a tax return involves sitting down and entering your information onto the required forms.

Step 6: Fill out your personal information

Step 7: Report your income

Step 8: Claim your deductions, credits, and expenses

Step 9: Double-check all information

Finish your first time filing a tax return and look at what comes next

The hard part is done! The last few steps required for your first time filing a tax return are just sealing the deal.

Step 10: File your tax return

The very last step that requires actual effort on your part is to officially file your tax return. There are three different ways to file your return:

• EFILE- If you had an accountant or tax preparer prepare your tax return, they'll likely file your return electronically using EFILE.
• NETFILE-Certain brands of tax software allow you to file your return electronically using NETFILE.
• Mail- You can maila paper return to the CRA. You will be deemed to have filed the return on the postmarked date.

If you need help completing and filing your return, meet with a tax professional at Filing Taxes. We take the time to listen and strategically analyze your complete financial picture to deliver tax planning that fits your life today and tomorrow. Our team will work with you to help you understand the solutions available to you and chart the best path forward.

To learn more feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step toward proper management of your finances.

Frequently Asked Questions:

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Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.