Personal T1 Tax ReturnsSelf-Employed (Sole-Proprietor) T1 Returns HST Returns Adjustments to previously filed returns missing info Voluntary Disclosures Program applications
If you have refund amounts from the last 5 years of taxes, and no other amounts due to CRA or “reviews” on your account, then you are likely to receive your refund amounts from those years within 5-10 business days.
Canada Child Benefits, GST Credit, and Trillium Benefits payments from the most recent 5 years are likely to be received in 4-8 weeks.
Older years refunds & benefits amounts can take up to 6 months to be fully received.
The most important documents to keep, so that you can be confident IF the CRA ever asks for proof of your deduction claims is the actual T-Slip (Tax Slip issued both by the organization to you and the CRA), or the purchase receipt (either digital or paper copy), or other official documentation of the claims, like your credit card statement or monthly bank statement.
If you’re claiming TIPS (cash) earned or other cash income, the accepted documentation is a handwritten log > I recommend a small/cheap notebook that you keep on your dresser and use for nothing other than logging your tips.
If you’re claiming vehicle expenses or meals, you should also be keeping a vehicle or trip log that includes the date, starting point & destination, client/purpose, odometer, and documentation of any reimbursement amounts.
Remember to keep your tax return receipts for 6 years from when you filed the returns.
If you don’t see the CRAs request for information (which is likely to be an email message that you have a message from CRA online on MyAccount), or fail to respond in the indicated time frame, or simply don’t have the documentation to provide to satisfy their request, the CRA will recalculate your tax returns based on changing your claims from the amount you filed, to $0.
They will send you a letter letting you know that because you failed to respond to their request for documentation, they disallowed your claimed deductions, recalculated your returns, and if there is an amount owing to them or to you it will be stated.
For most “healthy” Canadians in most years, your out of pocket medical expenses (not reimbursed by insurance or other) will not be enough to create an income tax credit in that year – the total amount has to be more than 3% of your net income or $2,400 for the year (whichever is less) to create any credits.
Here is a more comprehensive list of medical expenses that can qualify, based on your province of residence.
For the most part, the CRA will accept all reasonable business expenses as legitimate tax deductions. You must keep the receipts and documentation for your claimed expenses, and if the expenses are partly also personal expenses, then that adjustment must be reflected in your claims.
For example, you can claim “Business Use of Home” expenses – the costs of running a business from home, with or without a separate office or operational space – can be claimed relative to the % amount of the claim that is applied to your business use. For rent, utilities, and internet, the % used should be based on the square footage of your space that is dedicated to operating your business. If it’s a shared space such as your dining room table, the amount of hours per week used should also be factored in to reduce the amount of the claim appropriately.
Personal expenses that any worker, employee or contractor would normally have to pay for themselves, such as the cost of transportation to their regular place of employment, the cost of food/meals during working hours, or the cost or personally chosen clothing are rarely accepted business expense claims.
Here is the T2125 worksheet that shows all the various categories of business expenses the CRA normally accepts.
As long as you are up to date on filing your tax returns, and you are staying in touch with the CRA (so that you’re demonstrating your intention to pay them as soon as you have the money to be able to do so), they will allow you to make payments on your account balance over a long period of time.
The rate of interest on amounts owing to CRA is the Prime interest rate +1%.
The CRA will automatically claim your future refund amounts each year (and possibly some of your benefit amounts) to pay down your account balance.
Lowest fees for years with less than $50k annual employment income, and for people who are multiple years behind in filing tax returns Higher fees for years with more than $50k annual employment income, and for self-employed clients/years (to account for more forms and consulting consideration) Highest fees for 1 year only clients
21 Tax Tips I’ve learned over the past 3 years, from working with more than 500 clients, and well-over 1500+ filed returns. Once you KNOW these tips you can apply them in your everyday life.