Personal Tax Income
Who needs to file a tax return?
Depending on your residence status in Canada you can determine your tax obligations and whether you need to file a return.
You live in Canada permanently
If you are living and working in Canada you need to file a return if:
- you have to pay tax for the year
- want to claim a refund
- you want to claim the working income tax benefit (WITB) or you received WITB advance payments in the year
- you or your spouse or common-law partner want to begin or continue receiving the following payments (including any related provincial or territorial payments):
- Canada child benefit (CCB)
- GST⁄HST credit
- guaranteed income supplement (GIS)
If you have a spouse or common-law partner, they also have to file a return.
- the CRA sent you a request to file a return
- you and your spouse or common-law partner are jointly electing to split pension income.
- you disposed of capital property (which could be a principal residence) or you realized a taxable capital gain in the year
- you have to repay all or part of your old age security or employment insurance benefits.
- you have not repaid all the amounts you withdrew from your registered retirement savings plan (RRSP) under the Home Buyers’ Plan or the Lifelong Learning Plan
- you have to contribute to the Canada Pension Plan (CPP) for 2018. This can apply if your total net self-employment income and pensionable employment income is more than $3,500.
- you are paying employment insurance premiums on self-employment income or other eligible earnings.
- you have incurred a non-capital loss in the year that you want to be able to apply in other years.
- you want to transfer or carry forward to a future year the unused part of your tuition fees.
you want to report income that would allow you to contribute to an RRSP, a pooled registered pension plan (PRPP), or a specified pension plan (SPP) to keep your maximum deduction limit for future years up to date
you want to carry forward to a future year the unused investment tax credit on expenditures you incurred during the current year.
If you are not a resident of Canada or you are leaving the country you can visit here to determine your eligibility.
Starting a Business
Steps towards starting a business
Assessing your readiness, choosing a business structure, market research and writing a business plan are the primary steps you need to make in order to start a business. If these fundamental steps are taken appropriately, there is a higher chance that the business grows drastically. Your business should match your experience, interest and knowledge. Before you put too much work into planning your business, make sure that the industry you choose is the right one for you. You may want to consider what hobbies or interests you have, as well as what experience and skills you could apply to a new venture.
Starting your own business can be risky; however, desire, persistence, and innovative thinking can work in your favour. Believing in yourself and basing your decisions on knowledge and experience can lead to the success of your business. However, knowing the limits of your own abilities and not being afraid to ask for help from others will help you make informed business decisions.
You have the ability to establish the policies for your business and to set the tone for its culture. You can build a business that meshes well with your own personal values, rather than working for someone else whose policies or values may differ from your own.
You can choose a location for your business that suits your needs, whether that means working from home, working close to home, or taking the opportunity to travel and see different places. You might choose a trendy downtown office, or a place outside the city to avoid traffic or a long commute. While you have a lot of flexibility in choosing a location, you should take into account access to customers, employees and suppliers.
Running your own business can provide you with a tremendous source of satisfaction and pride. You will be able to see your business grow from the ground up.
However, you will also be responsible for the initial capital that will be required for your business and the costs involved with the day-to-day operations. There are tasks involved that you may not be trained for, such as purchasing, inventory management, or accounting. It never hurts to get professional help with the running of your business. Focus on the areas where you can provide the most value.
Owning your own business sometimes means providing your children and other family members with a place to work, and a way to finance their future. It is an opportunity to teach them valuable skills and spend more time together. Depending on your children’s career aspirations, you may be able to pass the business on to them when you are ready to retire.
After deciding what type of business you want to start, you need to choose a name for your business. Keep these things in mind when choosing a name for your business; Be sure it reflects the product or service you offer or you may confuse prospective customers, Think about how you want your business to be perceived, Pick something that is easy to pronounce and remember, Make it unique and distinctive to avoid confusion and legal issues.
Next step is to register your business with the government. Before you register your business, you will need to know, where your main location will be located, which other provinces and territories you plan to operate in, your proposed business name, the type of business that best suits your needs.
Once business is registered, there will be various different ways to get support and finance the business. Finding the best program that suits your business needs can help you grow your business without going in too much debt.
For more information you can also visit here .
If you need help with any of the mentioned steps you can contact Quest team and our experts will be more than happy to assist you towards your goals.
What is deducted from your pay?
Depending on your employment situation, you may receive payments in addition to your regular pay. Similarly, you may be employed in a special employment situation.
Canada Pension Plan (CPP) contributions
If you are 18 years old or older, but younger than 65, you are employed in pensionable employment, and you do not receive a CPP retirement or disability pension, your employer will deduct CPP contributions from your pay.
If you are at least 65 years of age but under 70 and you work while receiving a CPP or QPP retirement pension, your employer will continue to deduct CPP contributions from your pay, unless you elect to stop paying CPP contributions. You cannot elect to stop contributing to the CPP until you are at least 65 years of age. For more information, see Canada Pension Plan (CPP) contributions for CPP working beneficiaries.
The CPP provides basic benefits when you, a contributor to the plan, become disabled or retires. In the event of your death, the plan provides benefits to your survivors.
Your employer will calculate how much CPP to deduct with approved calculation tools, using the annual CPP contribution rates and maximums.
Your employer remits these deductions to us, along with his or her share of contributions, through payroll remittances.
To get information on the CPP, go to Canada Pension Plan – Overview.
Employment Insurance (EI) premium
If you are employed in insurable employment your employer will deduct EI premiums from your pay. There is no age limit for deducting EI premiums.
EI provides you with temporary financial assistance while unemployed and looking for work or if you’re upgrading your skills. You may receive EI assistance in either of the following situations:
- caring for a newborn or adopted child
- caring for a seriously ill family member with a significant risk of death
Your employer will calculate how much EI to deduct with approved calculation tools, using the annual EI premium rate and maximum.
These deductions are remitted to us, along with your employer’s share of premiums, through payroll remittances.
To get information on EI benefits, go to EI Regular Benefits – Overview.
Notice for employees working in Quebec
You are required to pay the Québec Parental Insurance Plan (QPIP) premium and you pay a reduced rate for EI premiums.
Income tax deducted
If you receive employment income or any other type of income, your employer or payer will deduct income tax at source from the amount paid.
Your employer or payer will calculate how much income tax to deduct by referring to your total claim amount on Form TD1, Personal Tax Credits Return and using approved calculation methods. For more information, go to, Filing Form TD1, Personal Tax Credits Return.
There is no annual limit as to the total amount of income tax your employer or payer can deduct in a year.
If you expect to be making less than the total claim amount indicated on Form TD1 for an entire year, you can ask your employer or payer to not make any deductions.
Your employer or payer will remit these deductions to us through payroll remittances.
There may be other amounts, such as pension plan contributions or union dues, that your employer deducts from your pay.
Look at your pay stub to see what other amounts are deducted. Your employer should be able to explain these deductions to you.
Disclaimer: All the information on this website – www.questcpa.ca – are taken from Canada Revenue Agency website and is published in good faith and for general information purpose only. Quest does not make any warranties about the completeness, reliability and accuracy of this information. Any action you take upon the information you find on this website (Quest), is strictly at your own risk. Quest will not be liable for any losses and/or damages in connection with the use of our website.