You’re lucky enough that this is your first year filing a tax return. How exciting! There are many reasons you’re filing a return for the first time, such as you’ve started your first job, or maybe it’s your first year of university. Welcome to the wonderful world of taxes. While it’s not rocket science, there are some things to know before filing for the first time.
Do you need to file a tax return?
Probably yes. Did you earn income in the year? Did you go to university/college? Even if you were in school, and earned no income, you need to file as you can transfer some of your credits to a parent/guardian or spouse. Also, to get your credits for GST/HST (over 19 years old), child tax benefit, and others, you’ll need to file a tax return. In the end, it’s best to file a tax return, even if it’s a nil return.
Being prepared is a must when it comes to filing your taxes. You need to ensure you have all our slips (T4s, T4A, T5s, T4E, etc.) for your employment and other income.
Are you in university/college? Don’t forget your T2202 Tuition/Education Certificate (you may have to login to your student account to get the T2202). You’ll need the T2202 to know how much tuition applies to the current tax year, plus it states how many months of part-time or full-time schooling you did in the year. You do not write off books or other school fees, as the credit for the number of months of schooling takes care of this. Also, you will get a T4A slip (Box 105) if you received any scholarships, bursaries, fellowships or grants, so don’t forget this slip.
Do you qualify as disabled? You may want to look into filing a T2201 Disability Tax Certificate. You’ll need a doctor to fill this out, and ensure he does a good job; whether or not you get the credit depends on how well he writes the T2201. This gives you a major credit against any income you earned in the year, and can be transferred to a spouse, parent, or caregiver.
There may be some deductions you are able to claim. Canada Revenue Agency (CRA) allows you to claim for donations, retirement contributions, employment expenses, and more.
Did you make donations to charity? If you did contribute to charities during the year, you should have gotten receipts. The receipt should state the charity’s name, registered number with CRA, and the amount. If you can’t find one, the charity should be able to et you a copy; some even allow you to go online to get a copy.
Did you make RRSP contributions? You can make contributions up to March 1st of the following year, so ensure you get all your receipts for any contributions you make. Usually you’ll get these sometimes in January/February for the prior year contributions, and later in March if you made any contributions in January or February.
Do you belong to a union or professional organization? Union dues generally show up on the T4. Professional associations, such as the College of Teachers, send you a receipt after you pay; some unions send a receipt if it’s not taken off your paycheques.
Did you move during the year? If you moved more than 40 KMs to either your place of employment or school, you can claim moving expenses. The cost of movers, renting a truck, hotels, meals, vehicle expenses (for your car), lease cancelation costs, costs of selling your old residence. Of course, you’ll have to deduct any allowance or reimbursement you got from your employer.
Did you have to purchase supplies in order to perform your job? Employment expenses can add up for many people. Employment expenses can include: accounting/legal fees, advertising/promotion, meals/entertainment (50%), lodging, parking, other automobile expenses (based on mileage), supplies (postage, stationery, etc.), home-office expenses (if you are required to have on by the employer). Trades people, apprentice mechanics, artists, and musicians can deduct expenses that relate to their profession, such as hammers, saws, musical instruments, art supplies, and more.
Some other information you should have at the ready when it comes time to file is your current address, phone number, email address, social insurance number, and birthdate.
The best thing to do is gather all your information you have that you believe will relate to your taxes, and when it comes to filing go through everything as you enter your slips. Or better yet, let a professional handle the whole thing, and relieve you of the headache.
Remember to keep all your slips, receipts, etc. for 6 years after the filing year.
Why Designating Your Tax Preparer as a Representative is a Good Idea
Is that Letter from CRA Legit?
Is Your Donation Going to a Registered Charity?
Are You Considered a Low-Income Worker?
Now’s the Time to Check Your RRSP
Why a Large Refund is Not Necessarily a Good Thing
Your Notice of Assessment (NOA)
Child Care Expenses