Navigating the Canadian Tax System

Tracking our journey

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Now on to this month’s newsletter 👇🏼

As we approach the tax season, it's essential to understand the ins and outs of taxes in Canada and ensure you're prepared to file your taxes for the year 2023. Understanding the Canadian tax system and knowing how to file your taxes accurately is crucial for all residents, including international students and newcomers. In this newsletter, we're going to clear some basic concepts for you and provide you with the knowledge and resources you need to navigate the Canadian tax landscape with confidence.

Deadline to file taxes

The deadline to file the return for this year is April 30, 2024. You can still file taxes after this date, but if you owe any taxes to the government then you will be charged a penalty fee. So it is best to file your taxes by the end of April.

Filing taxes as a student

If you are a student, it might seem very nice to know that you can file taxes and have around $100-$200 deposited in your account. However, this approach is not the best for everyone. You are using your education tax credits here and receiving some amount in return for it. The smart thing to do is not use the tax credits and save it for the future when you have a full time working job.
Here’s why: Let’s say your fees are $20,000 for a year. This amount is called a tax credit and is deductible from a person’s salary. If you straight away use the the credit and file a tax return, you might get around $100-$200 and you’ll probably pay an accountant $30. However, in the future, when you have a full time job and are making $40,000 per year, your will be $7,500. In a different scenario, let’s say you use the credit you have saved from previous year so $40,000 - $20,000 = $20,000. So the taxes will only be counted on the $20,000 which comes down to only $2,000. This will help you get a higher tax return.
Note: We totally understand if the example seems confusing, in that case simply ask your accountant, “What are the benefits of not using my education tax credits to file taxes as a student and instead using it when I have a full time job?” and we are sure you will understand what we mean.

BC Renter’s tax credit

We went over all the details of this new credit that has been introduced for this year, so you wouldn’t have to. To sum it up, all you need to do is fill a form along with T4 and mention the amount of rent you have been paying. Select yes for ‘are you staying here for more than 6 months‘.

Work From Home Tax Credits

Work from Home Tax Credits are deductions or credits for individuals working remotely to offset expenses like utility bills, internet costs, and office supplies. Form T2200, provided by your employer, outlines these expenses. During tax season, use this form along with other tax documents to claim the credits, potentially lowering your tax bill or getting a refund. Steps to Claim: 1. Get Form 2200 from your employer. 2. Keep records of additional expenses. 3. Provide relevant info when filing taxes. 4. Claim credits as instructed. Important: Check eligibility, keep accurate records, consult tax professionals, and understand province-specific laws.

Additional resources

Feel like reading more on the topic?
Here is CRA’s page on What you need to know for the 2024 tax filing season

Ready to watch a video and file your own taxes?
How to file taxes in Canada using Wealthsimple

Navigating the Canadian tax system may seem difficult at first, but with the right information and resources, you can tackle it with confidence. Feel free to reach out to us via social media links below!

Featured place of the month

Walk amongst 35 acres of tulips and field flowers at the Abbotsford Tulip Festival! Experience different varieties, walking trails and unique photo opps such as baby grand pianos, giant shoes, and swings. The Abbotsford Summer Flower Festival lasts six months starting with the Abbotsford Tulip Festival and ending with sunflowers. They will have food trucks on site and live music days. More information will be shared soon on their website: Lakeland Flowers

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