Understanding The T1 Tax Return in Canada
T1 Form popularly known as Income Tax and Benefit Return for filing an Income Tax Return for the individuals who are resident of Canada. T1 is the primary Income Tax Return document which is used for filing personal income tax with the Canada Revenue Agency (CRA) in Canada. T1 is a self declaratory income tax return form in which a Canadian resident declares all income which has been generated during the calendar year.
Who has to file T1 – Income Tax and Benefit Return
- To Pay Taxes on the Income - Every individual who lives in Canada, whether permanently or temporarily and has to pay taxes on the income earned during the year or wants to receive some credits or benefit payments from the Canadian Government is required to file T1 – Income Tax and Benefit Return.So putting it in a simple language, if anyone who is residing in Canada and is either employed or working as a self employed or earning some income from any other source like bank interest, dividends, pensions, rentals, capital gains etc., need to file a T1 Form – Income Tax and Benefit Return.
- To get the benefits or refunds – T1 Form is not only a Tax Return but it is also a Benefit Return which helps to get not only refund of income tax (if taxes are paid in excess of the amount due) but also the important document to get the Credits and benefits from the CRA / Government. The eligible individuals can get the benefits like Canada Child Benefit, GST / HST Credit, Climate Action Incentive or Canada workers benefits based on their individual or family income declared in the T1 Income Tax and Benefit Return.
Structure of T1 Form - How to fill T1 Form
|
Step |
Major Heads of |
Category |
Major Content |
|
1 |
Tax Payer Details |
Personal Details |
Taxpayer's Identification and Other Information |
|
2 |
Total Income |
Income |
Income from all Sources like Employment, Business Income, Investment income, Capital Gains etc. including Foreign Income |
|
3 |
Net Income |
Total Income Less Certain Expenses incurred to earn Income (e.g. Moving Exp, Child Care Exp etc.) or Contribution to RRSP etc. |
|
|
4 |
Taxable Income |
Net Income less miscellaneous Permitted Deduction amounts like Stock Option Deduction, Capital Gain Deduction or Carry over of losses of another year. |
|
|
5 (Part A) |
Federal Taxes |
Federal Taxes |
Fed Taxes are calculated on Taxable Income based on Fed Progressive Tax rates for Individuals |
|
5 (Part B) |
Federal Non Refundable Tax Credits |
This is sum total of all Federal Non Refundable Tax Credits and other amounts like Base CPP, EI premiums, Canada Employment amount, Disability amount etc. |
|
|
5 (Part C) |
Net Federal Taxes |
Fed Taxes are adjusted with Federal Non Refundable Tax Credits, Foreign Tax Credit, Fed Political Contribution Tax Credit etc. |
|
|
6 |
Refund / Balance Owing |
It includes Provincial Taxes, Tax Deducted, Canada Worker Benefits, Investment and other Tax Credits, Tax paid by instalments etc. |
When should I file my 2023 T1 Return
Generally in the case of individuals, the T1 filing due date is April 30th of the following calendar year for which the T1 return is to be filed. However in case of self employed individuals and their spouse can file their T1 Return form on or before June 15th.
Due date of payment Taxes
The due date of payment of taxes is April 30th in all the cases irrespective of the filing date.
Due Dates for Payment of Taxes and Filing of 2023 Tax Returns
|
Source of Income of Individual |
Due date for Tax Payment |
Due date for T1 Filing |
|
All Individuals (other than Self Employed and their spouse) |
April 30th, 2024 |
April 30th, 2024 |
|
Self Employed (Other than Tax Shelter Investment) |
April 30th, 2024 |
June 15th, 2024 |
|
Self Employed (having Tax Shelter Investment) |
April 30th, 2024 |
April 30th, 2024 |
|
Non Residents (with Business income other than Tax Shelter) |
April 30th, 2024 |
June 15th, 2024 |
|
Non Residents (Others) |
April 30th, 2024 |
April 30th, 2024 |
How to file Income Tax Return
If anyone has a simple T1 return, then the same can be prepared and filed very easily by the individual or spouse by themselves by using the online software program. In case of simple employment income, the individual can fill their personal details and income details which can be simply gathered from the T4 to be used as an input in the T1 return. The T1 return can be directly filed with the help of software program with the CRA via NETFIE. However precautions must be taken to fill the correct and complete details in the T1 return.
However in case of a complex return or involving some credits or benefits, the individuals may take the help of professional Tax Accountants / Preparers.
Interest and Penalties on delay in payment of Taxes or filing of T1 Return
CRA charges interest on any taxes which an individual owes and fail to make the payment on or before the due date. Besides interest, there shall be late filing penalties, if the T1 return is also not filed within the due date and having balance owing for taxes.
The interest on delay in payment of taxes shall be charged from the May 1, 2024 on the unpaid amount of taxes at the prescribed rates, compounded daily (prescribed interest rate for Q1 2004 is 10% p.a.).
Accounttax Pros – Your Trusted Tax Accountant
At Accounttax Pros, we being professional CPAs understand the importance of your T1 Personal Income Tax Return, therefore we endeavor to file your correct return on time and maximizing your benefits at affordable and competitive charges.
Tax Course / Tax Training (T1 Training) – Those who are interested to understand and learn how to prepare and file T1 Tax Return, we do provide personal tax training in the form of Online Tax Training or one to one in person training.