News 1. Who is Required to File a Tax Return?
February 6th, 2013 by Evelyn Jacks
Do you have to file an income tax return this year – or can you just skip it for once?
Generally, just "skipping it" is a bad idea. Here's why: if you are resident in Canada, you must file a tax return if any of the following apply:
1.You owe income taxes on your balance due date.
2.The Canada Revenue Agency (CRA) requests you file a return.
3.You have an amount outstanding under the RRSP Home Buyers' Plan (HBP) or Lifelong Learning Plan (LLP).
4.You are required to contribute to the Canada Pension Plan (CPP) because of self-employment income.
5.You are self-employed and opted to participate in the Employment Insurance (EI) program for self-employed taxpayers.
6.You disposed of capital property or otherwise earned a capital gain.
7.You elect jointly with your spouse to split eligible pension income.
8.You received an advanced payment of the Working Income Tax Benefit (WITB).
9.You are required to repay Old-Age Security benefits.
So, what if you don't have to file a return? Then, why would you bother? The most common reasons you may wish to file a return anyway are the following:
•To receive a refund of overpaid income taxes.
•To apply for federal refundable tax credits such as the Canada Child Tax Benefit (CCTB), GST/HST Credit or the Working Income Tax Benefit.
•To report capital losses for the purposes of reducing capital gains in the prior three years or to carry those loss balances forward to offset capital gains in the future.
•To qualify for provincial tax credits and benefits.
It's Your Money. Your Life. Filing a tax return is important because, by helping you recover overpayments of taxes and receive social benefits and tax credits, it will increase your income. Not claiming those valuable dollars is a sure-fire way to erode your wealth wealth and no one can afford that. See a tax professional if you are behind in your tax filings.