As tax season kicks off, taxpayers across Canada are gearing up to file their returns. The tax-filing deadline for most Canadians is set for April 30, while self-employed individuals have until June 16 to submit their returns. With over 400 tax credits and deductions available, taxpayers have several opportunities to reduce their taxable income. However, understanding the nuances of the tax system is crucial to avoid errors and maximize benefits.
The Canada Revenue Agency (CRA) has announced that its electronic filing service, Netfile, will officially open on Monday. This marks the commencement of the tax-filing season, providing individuals the means to submit their returns online. Forms such as T4, T4A, T5, and T3 are accessible through the CRA website via one's MyAccount profile. This convenience ensures taxpayers can gather necessary documents efficiently.
Importantly, the Registered Retirement Savings Plan (RRSP) contribution deadline for the 2024 tax year is March 3. Contributions made by this date can be deducted from your taxable income, offering a significant advantage for tax planning. Additionally, the CRA has deferred changes to the capital gains inclusion rate until 2026, maintaining the current rate where 50% of all capital gains are subject to tax. This decision provides continuity for individuals managing investments.
In light of recent postal disruptions due to the Canada Post strike, the CRA has granted a two-month extension for charitable donation tax receipts. This adjustment allows taxpayers more time to claim donations accurately. Brian Quinlan, a financial expert, notes the flexibility in claiming donations:
“So a donation made in the first two months of 2025 can be claimed either on your 2024 return or your 2025 return,” – Brian Quinlan
For those reporting capital gains or losses, it's important to note that the CRA will not be ready to accept these returns until late March. To accommodate this delay, interest and penalties relief will be available until June 2. This extension aims to provide taxpayers with sufficient time to comply with filing requirements without incurring financial penalties.
Self-employed individuals anticipating owing taxes should be particularly vigilant. Interest on any owed amount begins accruing at the end of April, despite their later filing deadline in June. Thus, timely preparation and submission remain critical for avoiding additional costs.
Even if individuals had no income to report for 2024, filing a tax return is necessary to access certain benefits and credits. Yannick Lemay, a tax consultant, emphasizes the importance of filing:
“They could be missing out on some credits and benefits that are being paid by the federal or provincial governments, but also sometimes there could be penalties that apply to your tax return even if you don’t owe taxes to CRA,” – Yannick Lemay
Taxpayers are encouraged to consider their entire family's tax situation when preparing their returns. Brian Quinlan advises against isolating one's tax return preparation:
“I think you just can’t sit and do your return in a silo or in isolation. You have to look at the returns of all your family,” – Brian Quinlan
