Frequently Asked Questions About Taxes
It’s essential to file taxes accurately and on time to stay on the right side of the CRA. However, when it comes to taxes, there are many questions clients have, but they may find it tricky to get all the answers they’re seeking.
So, to ensure you have all your doubts cleared, Aimee Lococo-Saraburu, CPA, wants to equip you with relevant information, and to do this, has answered some of the most frequently asked questions about taxes.
1. When is my income tax return due?
Generally speaking, an individual’s income tax return is due by April 30th of the following calendar year. If a person or their spouse/common-law partner is self-employed, the filing deadline for taxes is June 15th of the next calendar year. When the due date falls on a Saturday, a Sunday, or a public holiday recognized by the CRA, your return is considered on time if the CRA receives it or it’s postmarked on the next business day. If filing the return of a deceased person, the due date of the final return depends upon the date of death. For more information, see Guide T4011, Preparing Returns for Deceased Persons.
2. What if I don’t have all my information slips?
Tax slips are prepared and provided to you and CRA by your employer. Most tax slips get sent out before the end of February. However, T3 and T5013 have a March 31st filing deadline.
If you have not received or have lost or misplaced a slip, you can ask your employer, or the issuer of the slip, for a copy.
If you cannot obtain a slip on time to file your return or did not receive it and are registered on the CRA My Account for Individuals service, you may be able to view your tax information online. An authorized representative on your behalf can also obtain slip duplicates and information.
3. How should I tell the CRA about my change of address?
An address can get changed in one of three ways:
Online: Change your address online immediately using My Account.
By phone: Before you call, you will need your social insurance number, your full name, date of birth, your complete address, and a notice of assessment or reassessment so that the agent can verify your identity.
Call 1-800-959-8281 or 1-866-426-1527 if you are located in the Yukon, Northwest Territories, or Nunavut, and 613-940-8495 if you reside outside Canada and the U.S.
The CRA’s operation hours are Monday: 9 am to 9 pm, and Tuesday to Friday: 9 am to 6 pm. CRA is closed on Saturday, Sunday, and public holidays.
By mail: Complete Form RC325 Address change request and mail the completed form to the tax office address on the forms applicable to your location.
4.What is the penalty for missing the deadline to file income tax returns?
The CRA will charge you a late-filing penalty if you file your tax return after the filing deadline, and you owe tax that remains unpaid at that time. The penalty is 5% of your balance owing, plus 1% of your balance owing for each full month your return was filed after the filing deadline, to a maximum of 12 months.
Suppose the CRA charged a late-filing penalty on your previous years’ returns, your late-filing penalty for the current year maybe 10% of your balance owing. Besides, you will get charged 2% of your balance owing for each full month your return was filed after the filing deadline, to a maximum of 20 months.
5. How long should I keep my income tax records?
You must keep your supporting documents for six years in the event the CRA selects your return for a review. It applies even if you do not have to attach certain supporting documents to your return or file your return electronically.
The CRA may ask for documents other than official receipts, such as canceled cheques or bank statements, to prove any deduction or credit you claimed. Also, keep a copy of your return, the related notice of assessment, and any notice of reassessment.
6. What are the income tax rates in Canada?
The Federal tax rates for 2020 are as follows:
- 15% on the first $48,535 of taxable income, plus
- 20.5% on the next $48,534 of taxable income (on the portion of taxable income over 48,535 up to $97,069), plus
- 26% on the next $53,404 of taxable income (on the portion of taxable income over $97,069 up to $150,473), plus
- 29% on the next $63,895 of taxable income (on the portion of taxable income over 150,473 up to $214,368), plus
- 33% of taxable income over $214,368
- Ontario tax rates for 2020:
- 5.05% on the first $44,740 of taxable income, plus
- 9.15% on the next $44,742, plus
- 11.16% on the next $60,518, plus
- 12.16% on the next $70,000, plus
- 13.16% on the amount over $220,000
If you have any more questions about taxes, get in touch with the experts at Aimee Lococo-Saraburu, CPA. As a leading chartered professional accountant in Elmvale, ON, I render exemplary accounting, bookkeeping, and taxation services that are customized for my clients’ needs. To learn more about how I can help you, please click here or contact me by clicking here.