It is normal to see some clients have not filed their taxes for a number of years. If you ask why, they may come back with the similar idea: “I don’t make even close to $10,000 a year. It is pointless to complete the tax return.”
Well, there are a few points that need to be addressed here:
1. Filing your tax every year is good habit that you have a clear idea on how much you made as well as how much you paid for the previous year. 2. If you make a few thousand bucks during the summer as a student, then there will be a record of employment income in CRA after your tax is filed. Employment income creates RRSP contribution room so that it can be utilized for future years. 3. You can receive the GST/HST credit (including any related provincial credits). For example, you may be eligible if you turn 19 before April 2017. 4. You or your spouse or common-law partner want to begin or continue receiving Canada child tax benefit payments, including related provincial or territorial benefit payments. 5. You want to carry forward or transfer the unused part of your tuition, education, and textbook amounts. 6. You or your spouse or common law partners wants to claim the family tax cut, which will be discontinued for 2016 taxation year.7. CRA will be diligently sending you notice to file the previous returns. It is annoying, right?
CRA has indicated the following situations that filing a tax return is a MUST.
- You have to pay tax for 2015.
- A request made to you to file a return.
- You received working income tax benefit (WITB) advance payments in 2015.
- You disposed of capital property in 2015 or you realized a taxable capital gain.
- You have not repaid all amounts withdrawn from your registered retirement savings plan (RRSP) under the Home Buyers’ Plan or the Lifelong Learning Plan.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). This can apply if for 2015 the total of your net self-employment income and pensionable employment income is more than $3,500.
- You are paying employment insurance premiums on self-employment and other eligible earnings.
Are you falling in the one of the above situation and wondering if someone can help? Please give us a call.
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