JTT Accounting is ready to assist you with any accounting or tax-related query for individuals, companies, and professionals. We bring you the premier accounting services in Toronto, Canada, with a comprehensive range of services from bookkeeping to an advisory.
Whether you need a personal or business accountant, reach out to JTT accounting, and we’ll discuss a custom solution to keep you moving forward.
Check through this list of frequently asked questions to see if we can answer your question. If you don’t find the advice you’re looking for, reach out to our service team, and we’ll arrange a consultation.
Q: Why do I need a professional accounting service?
A: Are you an accountant? Then how can you expect to complete your tax return with the efficacy and efficiency of a trained accounting and tax professional? If you’re not a mechanic, would you try to fix your car if it broke down? No, you would call a professional mechanic.
It’s the same with your taxes. Using a trained, an experienced tax professional can optimize your return, helping you reduce your tax liability to the government. Whether you’re a business owner, independent contractor, employee, or sole prop, an accounting and tax firm can help you get more out of your filing.
Q: Is it necessary to file a tax return as a Canadian citizen or resident?
A: Yes, if you’re over 18 and earning an income, you must file a tax return. If you receive a request for a tax return, apply for the Working Income Tax Benefit (WITB), make contributions to the Canada Pension Plan (CPP), or need to repay social benefits, you’ll need to file a return.
You’ll also have to file a return if you don’t repay amounts withdrawn from Registered Retirement Savings Plans using the Lifelong Learning or Home Buyers’ Plans.
If these requirements don’t apply to you, you’ll file your return, claiming a refund, recording credits for the year, to receive Canada Child Tax Benefit, or GST/HST credits. Reach out to a personal tax accountant for assistance with filing.
Q: What is the deadline for my tax return?
A: The deadline for your tax return is on April 30th each year. You’ll file for the previous year’s income and deductions/credits. Self-employed individuals must file their return by June 15th.
We recommend you have your taxes ready for filing long before this date. If you file late, you may have to pay penalty interest on the amount owed.
Q: Can I file for taxes in previous years where I was a Canadian resident or citizen?
A: Yes. A personal tax accountant can assist you with filing your taxes for previous years. Make sure you have copies of all prior information like documents and slips.
Q: What are the requirements for filing my tax return?
A: If you’re a married couple with two kids and a full-time job, you’ll need the following supporting documents when filing your tax return.
- T4/Rl-1 from your employer.
- Daycare from your daycare provider.
- T5/Rl-3 to show any income from investments.
- A lease or document showing property tax payments if you’re a low-income family.
- RRSP contribution slips.
- Transit pass receipts.
Consult with a personal tax accountant to get the help you need to file an optimal return.
Q: How do I calculate my tax payable?
A: It’s reasonably simple. Calculate the total income received during the year and deduct your RRSP, childcare and alimony expenses, moving expenses, etc. Here’s the calculation.
Taxable Income x Federal tax rate = Net Federal Tax
Deduct tax credits like medical expenses, tuition credits, and donations, and you have the amount you owe in taxes for the year.
Q: Do I need to report income earned internationally?
A: Yes, all Canadian residents earning income in other countries need to report it on their tax returns.
Q: What’s the difference between credits and deductions?
A: Credits are eligible for use after determining the amount owed in taxes. They offset tax liabilities, reducing the amount you have to pay the government in taxes. A deduction reduces your annual income, potentially placing you in a tax bracket with a lower rate. A personal tax accountant can assist you with your return to optimize deductions and credits.
Q: What expenses qualify for the Home Renovation Tax Credit?
A: Some of the expenses qualifying for the Home Renovation Tax Credit include equipment rental, building material, any fixtures, permits, labor costs, and fees for professional services and consultation. However, financing costs do not qualify.
Q: What are the benefits of a Tax-Free Savings Account (TFSA), and how does it work?
A: The Tax-Free Savings Account (TFSA) lets Canadians earn tax-free income from their investments. All Canadian residents 18 or over may contribute a maximum of $5,000 to their TFSA each year. Withdrawal amounts are tax-free, but these contributions do not qualify for a deduction.
Q: Who qualifies for tax credits for their child care costs?
A: Parents supporting children can claim childcare expenses on their tax returns. If both parents earn an income, the parent with the lower annual income will file the claim.
To qualify, the parent(s) must incur the expenses while in gainful employment, conducting research activities, attending school, or actively seeking job opportunities. Parents with medical impairments or those imprisoned may also qualify for the Child Care Tax Credit.
Q: What is the Canadian Child Tax Benefit?
A: Parents of children under 18-years old are eligible for the Child Tax Benefit. This monthly tax-free payment assists parents with the costs of raising their kids. The size of the benefit depends on the family income, the number of children in the household, and the kid’s ages.
Q: Can I deduct RRSP contributions from my tax return?
A: Yes, you can claim official contribution receipts as a deduction on line 208 of your personal tax return up to the RRSP deduction limit.
Q: Can I file for GST/HST credits?
A: To be eligible for the program, you’ll need to be a Canadian resident over 19-years old. You’ll apply for the GST/HST credits when filing your taxes. The GST/HST credits are tax-free quarterly payments that assist low and modest-income families in offsetting part or all of the GST/HST they pay.
Q: What is the CPP Deduction amounts for 2022?
A: Maximum contributions to CPP by employers and employees will be $3,499.80, up from $3,166.45 in 2021.
Q: What is Canada’s payroll tax rate?
A: the total payroll tax rate comprises of the Social Security Tax (6.2% on the first $142,800, as of 2021), the Medicare tax at 1.45% (2021 guidelines), and an additional Medicare tax of 0.9% of earnings over $200,000 for single filings, and $250,000 for joint filings. The total payroll tax rate in 2021 was 7.65%.
Q: Do payroll taxes apply in Canada?
A: Canadian employers must withhold income tax and deduct fees for Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums. You’ll also have to submit any provincial employer tax.
Q: If I’m a sole-proprietor with no staff, do I need to file a tax return?
A: Yes, you’ll need to file a return. We recommend consulting with a business accountant like JTT Accounting. You’ll use the same income tax return, the T1 form, to file returns for small businesses. Corporations will need to file the T2 corporate income tax return.
Q: What are the reporting and accounting requirements for small businesses?
A: You’ll have to file corporate returns annually. GST/QST remissions are necessary if the company registers for GST/QST. You must report the source deduction and pay if the company has employees.
Q: Can I get a refund for tuition credits?
A: Tuition credits are non-refundable, and you won’t get any refund. However, they lower your total tax liability. You can file a claim for an education tax credit for all tuition fees over $100. You can claim credits for each month enrolled part-time or full-time (conditions apply).
You must take classes with approved post-secondary institutions. Students paying international tuition fees totaling $100,000 are eligible for tuition credits that carry over to future filings.
Q: Do students need to declare money given to me by my folks on my tax return?
A: No, you don’t need to declare funds given to you from family members.
Q: Must I declare any bursaries or scholarships on my tax return?
A: Yes. Scholarships and bursaries are forms of income requiring you to declare them on your tax return. They are not taxable items, but you need to report them nonetheless.
Q: What supporting documents do I need when filing my tax return?
A: You’ll need to have your Social Insurance Number or Individual Tax Number. You’ll also need the following documentation for filing your return.
- Tuition fees.
- Monthly transit passes.
- Moving expenses.
- Medical expenses.
- T4 for employees.
- T5 showing interest earned on savings or investments.
- Documents concerning bursaries and scholarships.
Q: Do I need to file a tax return if I’m an international student?
A: Yes, as an international student earning income through scholarships, bursaries, or employment must file a tax return every year to stay compliant with financial law and regulations.
If you’re not earning an income, there is no reason to file a return. However, you might want to file if you have credits or refunds, such as GST/QST credits or real estate credits.
Q: Do I need an accountant near me?
A: You do not necessarily need an accountant minutes away from you, so, you do not need to type in “accountant near me” or any similar variation into Google. With technology, you now have access to the best accountants at your fingertips. As long as your accountant or accounting services provider is knowledgeable about your province, he/she or the firm will be able to service you.
Hello there, remember that we can be your go-to Toronto accounting firm and handle any of your pressing accounting and compliance issues. Give us a call today.