Do you have to file an income tax return this year — or can you just skip it for once?
Generally, just “skipping it” is a bad idea. Here’s why: if you are resident in Canada, you must file a tax return if any of the following apply:
- You owe income taxes on your balance due date.
- The Canada Revenue Agency (CRA) requests you file a return.
- You have an amount outstanding under the RRSP Home Buyers’ Plan (HBP) or Lifelong Learning Plan (LLP).
- You are required to contribute to the Canada Pension Plan (CPP) because of self-employment income.
- You are self-employed and opted to participate in the Employment Insurance (EI) program for self-employed taxpayers.
- You disposed of capital property or otherwise earned a capital gain.
- You elect jointly with your spouse to split eligible pension income.
- You received an advanced payment of the Working Income Tax Benefit (WITB).
- You are required to repay Old-Age Security benefits.
So, what if you don’t have to file a return? Then, why would you bother? The most common reasons you may wish to file a return anyway are the following:
- To receive a refund of overpaid income taxes.
- To apply for federal refundable tax credits such as the Canada Child Tax Benefit (CCTB), GST/HST Credit or the Working Income Tax Benefit.
- To report capital losses for the purposes of reducing capital gains in the prior three years or to carry those loss balances forward to offset capital gains in the future.
- To qualify for provincial tax credits and benefits.
It’s Your Money. Your Life. Filing a tax return is important because, by helping you recover overpayments of taxes and receive social benefits and tax credits, it will increase your income. Not claiming those valuable dollars is a sure-fire way to erode your wealth wealth and no one can afford that. See a tax professional if you are behind in your tax filings.