Your income tax and benefit return - Segment 3
Host: Welcome to the segment called Your income tax and benefit return, part of the Preparing Your Income Tax and Benefit Return video.
Host: Welcome to the segment called Your income tax and benefit return, part of the Preparing Your Income Tax and Benefit Return video. This segment mentions webpages where you can get more information. You can find links to these webpages in the Related links for this video.
I'm Karen Davis, your host for this segment. And with me is Sarah Taylor. Welcome Sarah.
Subject matter expert: Thank you Karen.
Host: So, we've got all of my information slips and receipts together. Walk us through the key sections of the income tax and benefit return so that we can see where we should report income, deductions, credits, and tax owing.
Subject matter expert: Sure. Let's start with identification. Enter your name and your current address, with the postal code and the province or territory of residence, as of December 31. If you are a newcomer to Canada, enter the date you entered Canada, since this is your first tax return. After filing your first return, you won't have to fill in the date of entry on your following returns.
Host: I understand that I can also provide my email address after reading and agreeing to the terms and conditions. If I do so, will I receive my notice of assessment by email?
Subject matter expert: Not exactly. If you are registered to My Account and provide your email address, the CRA will use it to notify you that your mail is available to view on the My Account secure online service. This means that correspondence eligible for online delivery, such as your notice of assessment and reassessment, will no longer be mailed to you, but you will be able to view them, and print them if required, in My Account. For more information, go to the webpage on My Account.
Host: The CRA also asks for my marital status, the name of my spouse or common-law partner, and his or her SIN and income. Why does the CRA need that information?
Subject matter expert: The CRA needs the information about your spouse or common-law partner to calculate the benefits and tax credits that are based on your family situation. For the CRA to calculate your benefits, both you and your spouse or common-law partner must generally file an income tax and benefit return every year, even if you have no income to report. If either you or your spouse or common-law partner has not filed a return, you have to file one so the CRA can send you certain benefits and credits. For more information, go to the webpage on completing a return.
Host: What is the section called "Elections Canada" on the tax return for?
Subject matter expert: This section is for Canadian citizens. The National Register of Electors contains the name, sex, date of birth, address, and unique identifier of eligible electors and is used to produce electoral lists and to communicate with electors for federal elections or referendums. Elections Canada will only use the information you provide for purposes permitted under the Canada Elections Act.
Host: Why is this information on the return?
Subject matter expert: This is a simple and efficient method of keeping the electoral lists up to date, based on an individual's annual return.
There are two questions in this section. Question A asks, "Are you a Canadian citizen?" If you are, tick the Yes box next to the question. If you are not a Canadian citizen, tick the No box. Question B is only for Canadian citizens. If you ticked the Yes box next to question A and you would like to authorize the CRA to give your name, address, date of birth, and Canadian citizenship status to Elections Canada, tick the Yes box next to question B.
If you don't fill in this section, you still keep your right to vote, but you'll have to take other steps to be added to the electoral list.
For more information, go to the webpage on Elections Canada.
Host: So I've entered all of my identification information. What's next?
Subject matter expert: You're now ready to declare foreign property, report income, and claim deductions and tax credits on the appropriate lines of your return.
Host: So let's start with declaring foreign property.
Subject matter expert: You start by answering the question about owning or holding foreign property. If the total cost of all your foreign property was more than $100,000 Canadian, you have to fill out Form T1135, Foreign Income Verification Statement, and send it to the CRA.
Host: Now let's discuss reporting income.
Subject matter expert: Gather all the information slips you got from employers or payers. On line 101, report the total of amounts shown in box 14 of all your T4 slips. Report tips and gratuities not included on your T4 slips on line 104. The amount you calculate on line 150 is your total income.
Host: Are there any amounts that I received that I would not include as income?
Subject matter expert: Yes. Don't include the following as income: lottery winnings, GST/HST credit payments, Canada child tax benefit payments, and payments from related provincial and territorial programs. For a list of the types of payments that are not taxed, go to the webpage on this topic
Host: And how do I claim deductions on the T1 return?
Subject matter expert: As you did when you reported income, identify and claim deductions line by line on the T1 return. Deductions are divided into two groups on your return: those that are deducted from your total income and those that are deducted from your net income.
The amounts on lines 207 to 235 are deducted from the total income shown on line 150 to give you your net income on line 236. Some types of deductions claimed in this part of the return include RRSP deductions, child care expenses, support payments you made, and union dues.
The amounts on lines 244 to 256 are deducted from your net income on line 236 to give you your taxable income on line 260. Some of the deductions claimed in this part of the return include the Northern residents' deductions and the capital gains deduction.
For more information, go to the webpage on deductions.
Host: You mentioned tax credits. What are some of the tax credits that I might be able to claim?
Subject matter expert: You might be able to claim some non-refundable tax credits and other federal credits to reduce the federal tax you'll owe. Some of these credits include the basic personal amount; the public transit amount; medical expenses; and the tuition, education, and textbook amounts.
Host: Where on my return do I claim the non-refundable tax credits?
Subject matter expert: Lines 300 to 395 are for non-refundable tax credits. Remember to claim the corresponding provincial or territorial non-refundable tax credits that you are entitled to on the provincial or territorial forms. These credits are called non-refundable tax credits because, if their total is more than your federal tax, you won't get a refund for the difference.
For more information, go to the webpage on non-refundable tax credits.
Host: So we've talked about income, deductions, and non-refundable tax credits. What are the other federal credits you mentioned?
Subject matter expert: Individuals may be entitled to various other credits including the federal dividend tax credit, tax deducted at source, Canada Pension Plan and employment insurance overpayments, and provincial or territorial tax credits, among others. For a full list of the credits, refer to the General Income Tax and Benefit Guide for your province or territory of residence.
Host: So, where do I claim these credits?
Subject matter expert: You can claim some of these credits in step 3 of Schedule 1, or on lines 437 to 479 of your return. Then, you deduct the total credits on line 482 from your total payable amount on line 435. This will result in either a refund or balance owing. If your total payable is less than your total credits, enter your refund on line 484. Or, if your total payable is more than your total credits, enter your balance owing on line 485.
Host: I am expecting a refund, when should I receive it?
Subject matter expert: The CRA usually processes paper returns in four to six weeks. However, returns filed electronically can be processed much faster.
If you file electronically and have direct deposit set up, you could get your refund in as little as eight business days. Direct deposit is a fast, convenient, reliable, and secure way to get your income tax refund and your credit and benefit payments directly in your bank account.
For more information, go to the direct deposit webpage.
Host: So I've filled out my return, when do I need to file it?
Subject matter expert: Generally, your T1 return for each year has to be filed on or before April 30 of the following year. Self-employed individuals and their spouses or common-law partners have until June 15 of the following year to file, but they still have to pay any balance owing on or before April 30.
For more information on filing and paying, see the segment of this video called Filing and payment methods.
Host: What we've discussed so far might seem a bit overwhelming for those of us who are filing for the first time. Where can we go to get more help?
Subject matter expert: It may take more time for you to fill out your first T1 return because you'll want to read through the headings or topics for each line to see if the income, deduction, or credit applies to you.
If you use tax preparation software, you'll get detailed information on deductions and credits to help you figure out if you're eligible. For a complete list of certified software, go to the NETFILE webpage.
You can also find more information in the General Income Tax and Benefit Guide to help you fill out your return.
If you have modest income and a simple tax situation, watch the segment of this video called Getting help.
If you've reviewed the information in the CRA's publications and on the website and you still have questions about preparing your T1 return, call the individual income tax enquiries line at 1-800-959-8281.
Host: Thank you Sarah.
This concludes the segment on your income tax and benefit return, part of the CRA's Preparing Your Income Tax and Benefit Return video. Thank you for watching.
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