New to filing a Canadian personal income tax return? Here are a few things you should be aware of.

Below is one of many informational pieces available on TD Stories designed to help you file a Canadian personal income tax return.  You may also be thinking about your current financial goals and possible next steps, and if so please book an appointment with a TD advisor to discuss them.

If you’re new to filing your personal income tax return in Canada, you might feel overwhelmed about where to start.

From knowing which tax slips you need from your employer, to learning about the tax credits and deductions you might be eligible for, to simply understanding how to get your return submitted properly – and on time – to the Canada Revenue Agency (CRA), there’s no shortage of tax information to learn. Needless to say, it's natural to feel a little bit lost.

To help try to make things a little bit easier for you, here are a few things to be aware of  about filing your personal income tax return in Canada.

What is income tax?

Okay, let's start with the basics. In Canada, your income tax obligations are based on your residency status, which you can read more about on the CRA’s website here. But generally speaking, if you live and work in Canada, the income you earn from your job(s) and any investments you may have is subject to tax. This tax is called income tax. Income tax helps the government pay for the programs and services it offers, such as health care and public education.

Most Canadians are required to pay both provincial and federal tax on their income. How much tax you have to pay on your income is determined by tax brackets and their corresponding marginal tax rates, which are established by the provincial and federal governments. To learn a little bit about tax brackets and marginal tax rates, read our introductory article here.

While your employer should have taken income tax off each of your paycheques throughout the year, completing a personal income tax return is still required to determine whether or not you paid the right amount of tax for you based on your income, which can also include any investment income you may have earned.  If you paid too much tax throughout the year, you might get a tax refund, and if you didn’t pay enough, you might have a tax bill to pay.

How do you file a personal income tax return in Canada?

Personal income tax returns are submitted to the CRA. There are a few different ways you can file your personal income tax return to this government agency.

Most people have the following two options available: (1) You could hire and pay for a certified accountant to help prepare and file your return on your behalf; or (2) You could complete and file your return yourself electronically. If you opt to file your own return, it is recommended by the CRA that you use a CRA-approved tax software package to file your return. To find out about CRA-approved tax software, visit the CRA website here. Once you’ve completed your return, you would submit it online directly to the CRA via NETFILE, the agency’s web service.

However if you have a modest income and a simple tax situation, you may be able to  attend a free tax clinic (made available through the CRA) where a volunteer could  help complete and  file your return for you. . The CRA has a list of available free tax clinics with information about whether you would be eligible to use them which you can read about here on the CRA’s website.

It may also be possible to print and mail your tax return to the CRA. To see if you would be eligible to submit a paper tax return to the CRA, click here on the CRA’s website.

What information do I need to file a personal income tax return?

To complete your personal income tax return, the CRA requires certain personal information including your full legal name, address and social insurance number (SIN). You will also need to provide proof of all the income you earned during the tax year you’re filing for. So, for example, for the 2023 tax year, you’ll need to provide the CRA with income information for the calendar year 2023.

Most Canadian employers provide their employees with an annual statement of income to use for filing their tax returns. The form is prescribed by the CRA and is known as a "T4 – Statement of Remuneration Paid". It is generally sent out by the end of February of the year following the tax year for which a return must be filed. Your T4 is a record of how much money you were paid by your employer, as well as the deductions your employer made from your salary, which could include federal taxes, provincial taxes, contributions to the Canada Pension Plan, union dues and other deductions. The T4 acts as the record of your income information from that employer for the year, and that information is needed to file   your taxes, so ensure you receive it from your employer.

In certain instances, the government may allow you to apply a tax credit or deduction regarding certain expenses from your income, which can help bring down your total taxable income for the year and therefore could result in a tax refund. These deductions and/or tax credits could include childcare expenses, contributions to a Registered Retirement Savings Plan (RRSP), or expenses related to a disability.

For more information about which deductions and/or tax credits you may be eligible for, please visit the CRA website here.

When are taxes due?

In general, personal income tax returns for any year are due by the end of April of the following year. For example, personal income tax returns for the 2023 tax year are due by April 30, 2024. If you don’t file on time, you might be subject to penalties.

If you owe any tax, how do you pay it?

If you owe any tax, you can pay it in several ways including online or in person at your bank or credit union, or by mail.

If you wish to pay your taxes online through your financial institution, you can do so by adding the CRA as a bill payee, similar to how you would pay your phone or utility bill. TD customers can use EasyWeb or the mobile TD  app to pay any amount owing on their tax returns.

If you have any questions about filing a personal income tax return, please visit the CRA website here.