8.3.7 What you owe or get back
- 8.3.1 Deductions from income
- 8.3.2 Registered retirement savings plans
- 8.3.3 Other registered savings plans
- 8.3.4 Video: Taxes and registered savings plans
- 8.3.5 Tax credits
- 8.3.6 Non-refundable and refundable tax credits
- 8.3.7 What you owe or get back
- 8.3.8 Taxes in your life
- 8.3.9 Summary of key messages
Once you've entered your income and claimed any deductions or tax credits, you calculate the total taxes owing and make the final adjustments on page 4 of the T1 tax return (see illustration). These adjustments include:
- taxes deducted by your employer (line 43700)
- taxes you paid by instalments (line 47600) and pension contributions due (line 42100) if you were self-employed, or have investment income
- provincial or territorial taxes and credits (lines 42800, 44000, 47900)
- other benefits and adjustments.
Review the T1 return in the illustration and make a note of any items that you think apply to you.
Text version: Step 7 - Refund or balance owing
Step 7 - Refund or balance owing
Line 42100 - Canada Pension Plan (CPP) contributions payable on self-employment and other earnings
Line 42200 - Social benefits repayment
Line 42800 - Provincial or territorial tax
Line 43500 - Total payable
Line 43700 - Total income tax deducted
Line 43800 - Tax transfer for residents of Quebec
Line 44000 - Refundable Quebec abatement
Line 44800 - CPP overpayment
Line 45000 - Employment insurance overpayment
Line 45200 - Refundable medical expense supplement
Line 45300 - Working income tax benefit (WITB)
Line 45400 - Refund of investment tax credit
Line 45600 - Part XII.2 trust tax credit
Line 45700 - Employee and partner goods and services tax/harmonized sales tax (GST/HST) rebate
Line 47600 - Tax paid by instalments
Line 48400 - Refund
Line 48500 - Balance owing
Many people celebrate getting a large refund, thinking of it as a surprise bonus. What it really means is that more of your money was collected for income taxes than necessary. Careful tax planning can help ensure that you send only the amount necessary in advance tax payments.
Some people like to think of the tax refund as a type of savings plan. If you receive a tax refund, save it—or at least most of it. It's money you have not spent through the year, so use it to pay down debt or add to your investments. And save at least as much in the next year, even if you can cut back your tax deductions or instalments.
The final result of these calculations is your tax refund. If your payroll deductions or instalments were too high, you'll receive a refund. If they were too low, you'll have a balance owing. You must pay a balance owing by April 30 to avoid penalties and interest.
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