Benefits of Filing Your Tax Return

Even if you do not have to file your tax return, remember: in most cases you will get money from the Government when you do. Below are some standard situations:

-       You worked part or full-time and your employer issued you a T4

Your employer regularly deducts income tax from your pay cheques. Because you are not required to pay tax for the first $10,822 of earned income (in 2012), you would be entitled to a full refund of the income tax deducted. If you file an income tax return reporting earned income, you will also start to accumulate RRSP deduction room limit for the future.

-       You want to apply for the GST/HST credit

If you are 19 years of age or older, you might be eligible to receive the GST/HST credit. You must apply for the GST/HST credit by filing your tax return and completing the GST/HST application area on page 1 of your tax return.

-       You or your spouse or common-law partner want to receive Canada Child Tax Benefit (CCTB) payments

All you have to do is file your tax return; otherwise you will not get that money.

-        You have incurred a non-capital loss

Generally, a non-capital loss for a particular year includes any loss incurred from employment, property or a business. CRA will allow you to carry non-capital losses back for three years and apply them against your income at any of those years. That would entitle you for a tax refund. You can also carry a non-capital loss arising in tax years ending after 2005 forward 20 years (or seven years for a non-capital loss arising in a tax year ending prior to March 23, 2004).

-       You want to carry forward or transfer the unused part of your tuition, education, and textbook amounts

For you to claim tuition fees paid to an educational institution in Canada, your institution has to give you an official tax receipt or a completed Form T2202A, Tuition, Education, and Textbook Amounts Certificate. For you to claim tuition fees paid to an educational institution outside Canada, your institution has to complete and give you Form TL11A, TL11C, or TL11D. You can claim only the fees paid for courses you took in the year, regardless of the time of payment.

You have to claim your tuition, education, and textbook amounts first on your own return, even if someone else paid your fees. However, you may be able to transfer the unused part of these amounts to your spouse or common-law partner or your spouse’s or common-law partner’s parent or grandparent. The maximum amount you can transfer in a year is $5,000.

You can carry forward and claim in a future year the part of your tuition, education, and textbook amounts you cannot use (and do not transfer) for the year. However, if you carry forward an amount, you will not be able to transfer it to anyone. You have to claim your carry-forward amount in the first year that you have to pay income tax.

-       You want to carry forward other unused amounts

You can normally carry forward unused charitable donations, interest on student loans (both for up to five years) and moving expenses, along with some others.

-       You want to claim Working Income Tax Benefit (WITB)

The WITB is generally available to individuals aged 19 and older who are not attending school full-time and whose income is within the eligibility range. This benefit was introduced in 2007, and is a refundable tax credit. For example, an individual living in Ontario can get up to $970 in WITB payment from the Government by simply filing his tax return for 2012.

In addition, a number of new or enhanced benefits and credits are available to eligible tax filers as part of Ontario’s tax plan:

  • The Ontario Energy and Property Tax Credit. If you pay rent or property tax, you could get up to $963. If you are a senior, you could get up to $1,097. The credit is paid monthly as part of the Ontario Trillium Benefit.
  • The Ontario Child Benefit. It is a tax-free monthly payment for low- to moderate-income families with children under 18 years of age. It is paid to all eligible recipients whether they work or not. Your payment is based on the number of children under 18 years of age in your family and your adjusted family net income. The Ontario Child Benefit provides a maximum benefit of $1,100 annually per child.
  • The Ontario Senior Homeowners’ Property Tax Grant. If you are 64 years of age or older and you own a home, you could qualify to get up to $500 to help with the cost of your property taxes.

All you have to do is file your tax return for the year 2012 or for any previous 10 years!

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