A checklist for tax time

Despite heralding the long-awaited coming of spring, many Canadians dread the month of April. Why? Because it’s tax time again.

Don’t fret. We’ve got you covered with our handy income tax checklist.

When is the deadline to file your 2023 income tax return?

For most people, the deadline for filing is April 30, 2024.

If you file later than the deadline, and you owe money on your return, the Government of Canada will charge interest on the amount owed. If you don’t owe money on your return, it’s still in your best interest to file on time so that you don’t disrupt any payments you’re entitled to (such as GST/HST credits, the Canada Child Benefit or Old Age Security payments).

If you or your spouse is self-employed, you must file your tax return by June 17, 2024 (but still don’t delay—if you have a balance owing for your 2023 taxes, it must be paid by April 30, 2024)

What do you need to file your tax return?

To prepare for and file your income tax return, you’ll need to gather your tax slips and, depending on what deductions you’re claiming, your receipts. What slips you might need depends on a variety of things, including your employment situation, whether you have dependents, if you have a spouse and what province you reside in.

Some common tax slips you may need include:

• Employment income (T4 / Relevé 1 in Quebec)
• Pension, retirement, annuity or other income (T4A / Relevé 2 in Quebec)
• RRSP or RRIF income (T4RSP, T4RIF / Relevé 2 in Quebec)
• Investment income (T3, T5 and T5008 /Relevé 16, Relevé 3 and Relevé 18, respectively, in Quebec)
• Tuition (T2202 or TL11 / Relevé 8 in Quebec )
• Partnership income (T5013 / Relevé 15 in Quebec)

Some common receipts you may need to include:

• RRSP contribution receipts (for prior year and for first 60 days of current year)
• Charitable donations and political contributions
• Medical expenses
• Child care expenses
• Professional or union dues (if not included on your T4)
• Moving expenses
• Examination fees for professional designations
• Rent or property tax (ON, MB)

You can prepare and file your return yourself – on paper or online – or use a service to do it for you. For most provinces, you can access all the Government of Canada forms here. If you’re a resident of Quebec, you may have to file a separate provincial return – Quebec residents can find more here.

There can be changes to the tax rules each year – make sure you read up on them prior to doing your tax return so you can take advantage of any tax deductions you may be eligible for. The Government of Canada posts tax changes, key dates and other important information each year.

How much tax will you have to pay?

Your annual tax bill will ultimately depend on the amount of income you earned and what tax deductions you might qualify for.

On your tax return, you add up your gross income from all sources (employment income, investment income, pension income, real estate income, etc.). From your gross income, you minus any qualifying tax deductions (such as RRSP contributions, charitable donations, etc.). That leaves you with your taxable income.

Both your federal and provincial rates of tax (also known as “tax brackets”) you will pay is based on your taxable income. Canada’s tax system uses marginal tax rates, which means that the more income you make, the higher your taxation rate.

For the 2023 tax year, the federal tax rates are:

• 15% on your taxable income that is $53,359 or less, plus
• 20.5% on taxable income between $53,359 and $106,717, plus
• 26% on taxable income between $106,717 and $165,430, plus
• 29% on taxable income between $165,430 and $235,675, plus
• 33% on any taxable income over $235,675

Example:

If your total annual income for 2023 was $110,000, your income would be taxed as follows:

• 15% on the first $53,359 of your income
• 20.5% on the next portion of $56,641 of your income ($110,000 - $53,359)
• 26% on the remaining $3,283 ($110,000 - $106,717)

In addition to federal taxes, you must also pay provincial or territorial tax on your income, which differ. To find your provincial tax rates, visit the Government of Canada website.

How can you reduce your tax burden?

No one likes to pay more taxes than they need to. That’s why you should make the most of all your available tax deductions to reduce your taxable income.

Some of the more common tax deductions are:

• Pension Adjustment - if your employer makes pension contributions on your behalf.
• RRSP contributions - find your maximum allowable contribution on your Notice of Assessment from the previous year. Learn all about RRSPs.
• Donations to charitable organizations or political parties

When it comes to taxable earnings on your investments, different investment types are taxed differently. A little investment tax planning may help. Learn more about the Four pillars of investment tax planning and better understand the preferred tax treatment of Capital gains in your portfolio. 

We’ve got tax tips for everyone:

• 5 tax tips for investors
• 5 tax tips for parents
• 5 tax tips for homeowners
• 5 tax tips for seniors and retirees
• 5 tax tips for the self employed

What to do with your tax refund

If you’re fortunate enough to get a refund on your taxes, we’ve got a few ideas about what you could do with your extra cash. Read more at Ten things to do with your 2022 refund.

Other resources

For all the up-to-date information on your income tax return, please visit the Government of Canada website. Residents of Quebec can also find more information at Revenu Quebec.