Posted on April 25, 2025 in
Uncategorized
Filing your tax returns can be a difficult affair, particularly if you are new to Canada or a foreign student residing here. Filing taxes is required, and even if you are a newcomer to Canada, you may be eligible for considerable financial rewards.
In this article, we will examine some of the most common mistakes people make while submitting tax returns, as well as how to prevent them in order to receive the most tax credits and refunds possible. Here are ten key reasons to comprehend the purpose of taxes in Canada and why it is critical that you grasp the system.
Tax Returns Deadlines and Record Keeping
Tracking tax reporting dates is critical because failing to do so will result in penalties issued by the Canada Revenue Agency. If you are running late on your taxes, you should call the CRA so that they can create an arrangement for you.
But meeting deadlines is critical. It is critical to stay on top of tax filing deadlines; otherwise, you will be subject to CRA fines.
Personal tax filing date is April 30, 2025, whereas self-employed individuals can file until June 15, 2025 (however you must pay by April 30, 2025 if you owe self-employment taxes).
If you owe money to the CRA, you can request that they construct an instalment plan for you, but you must first disclose your financial situation to them.
The Canada Revenue Agency (CRA) demands that you preserve your records for at least six years. This implies you must maintain all electronic or paper documentation to support your claim. You are not required to transmit receipts to the CRA; nevertheless, you must present them if the CRA requests them.
If you fail to produce your records or receipts, the CRA may lower your claim, and you will not receive the whole amount.
What are Free Tax Clinics?
If you have a straightforward tax situation and fall into a lower income group, you are qualified to use a free tax clinic. Free tax clinics are locations where eligible persons can receive assistance in submitting their tax forms. These locations are run by community organisations, and volunteers assist those who are having difficulty submitting their tax returns.
In Canada, whether you are a refugee or a foreign student, you must file your tax returns.
Some of these clinics just accept walk-ins, while others require appointments. In some situations, you can drop off your documents and subsequently return to get them.
Why is it Preferable to do Tax Filing Electronically?
Filing your taxes online is both convenient and useful. If you file your taxes online, you will receive your return faster.
Similarly, you can receive your notice of assessment (NOA) as soon as the Canada Revenue Agency (CRA) processes your income tax filings. In most situations, you can receive your returns immediately to your bank account.
In 2024, almost 93% of Canadians submitted their income taxes online. You can file your tax returns yourself using NETFILE, a certified tax program, to make the process easier. To view your NOA, you only need to have a registered CRA account.
NETFILE program is simple to use because it guides you step by step. This reduces the likelihood of making errors and allows you to complete the process with greater accuracy.
RRSP Contributions: Are they Important?
There are various ways to take advantage of tax benefits and lower your taxable income. Childcare bills, contributions, and tuition fees are some of the most prevalent deductions. If you make charity donations, retain your receipts to receive larger reimbursements at the end of the year.
Contributions to a registered retirement savings plan (RRSP) can be deducted from your taxes. RRSP income is normally tax-free as long as you keep the funds in the plan. In general, when you get plan payments, you must pay taxes.
You can contact with your financial advisor to determine how much contribution you can make to best use your RRSP contributions.
Conclusion
These pointers can help you understand the Canadian tax system. Try to file your tax returns before the deadlines to save time and energy and avoid potential penalties from the tax authorities.
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About The Author
Content Writer
Farhan Zaheer is a Content Writer at ABM College. He holds a Master’s degree from Heidelberg University in Political Science. He also holds a Master’s degree in Mass Communication; and has been working with newspapers for over 10 years.