Thursday, February 29, 2024

Do you need to file Income Tax in Ontario?

Like any other country, every citizen in Canada has the responsibility to pay income tax. However, as a new citizen in Ontario, Canada, you may not know how to file taxes every year. According to the CRA, you have to file your tax annually. Still, the rules are not applicable for every case.

Filing your income tax return is a must when-

  • You have owed the amount to Canada Revenue Agency.
  • You have a business and are self-employed. You must pay premiums for Canada Pension Plan. It is similar to Employment Insurance premiums.
  • You have sold your house.
  • You need to repay your Old Age Security.
  • You have received a Request to File from the CRA.

Your residency status in Canada does not affect the need for filing income tax returns. But, it will make a difference in the way of filing the tax. You need to report everything about your income. Moreover, you have to mention details about the availability of deductions and credits. Before filing the tax return, you must ensure that you have fulfilled the CRA’s criteria.

While residing in a different country and receiving income from a Canadian business, you must file the tax return. Moreover, when you have a house and any other type of property in Canada, you cannot avoid it.

Exemption rules for occupation and age

Age does not play a role in affecting your income tax return filing process. Students also have no exemption from filing their taxes. A 20-year-old student may be an entrepreneur earning more than $3,500. He should file his income tax return.

Is it essential for everyone to file the tax return?

You may not always need to file it. However, you must try to do it for several reasons-

  • You will get a chance to claim a refund.
  • Your tax return details measure your eligibility for provincial and federal programs. Although you had no earnings, you would still be eligible for GST credit and Ontario Trillium Benefit.
  • The limit to RRSP contribution increases while you earn money. Although you have not anticipated a refund, you will find a better RRSP contribution.
  • When you need to pay tuition fees for the school, you have to mention the amount on the tax return. In the present year, you may have thought of avoiding the use of credits. You can transfer credits and report them on the tax return.

Late filing of the tax return will result in penalties. The penalty is about 5% of the owed amount. Moreover, you have to pay an additional 1% every month.

Thus, use your Income Tax Calculator Ontario and avoid any delay. There are ways of filing your taxes online. However, to keep away from confusion, you may engage professionals. These professionals use reliable tax software to make the overall process easier. The automated process will save your precious time. You can ask certified professionals about the deadline of the tax filing process. They will provide you with the best instructions.

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