Managing your financials can become overwhelming at times, which is why it’s vital for you to work with the right people and get your particular tax requirements checked out. Keep in mind that filing your tax returns in Canada must be done within a deadline if you want to avoid extra fees.
The RC Financial Group specializes in managing everything regarding your financial needs. Overall, our team is composed of chartered accountants, investment advisors, and business consultants, which is more than enough to cover your needs.
There are many things to keep in mind regarding your tax return in Toronto. We’re going to lay down all the information you need so that you have a clearer idea of how you can work with us for your Toronto tax return services.
What Is a Tax Return?
In essence, a tax return is a form where you (the taxpayer) make an annual statement where you input your income with the amount of tax money payable to the government. Filing your tax return document in Toronto is essential if you want to calculate the tax you own correctly.
Keep in mind that if you miss the tax return deadline, you may have to pay up to 5% of the tax year’s bill. Additionally, the Community Reinvestment Act can add 1% of the balance for each month you miss in payments for a maximum of 12 months.
It’s also important to note that the longer you take to fill out your tax return form, the higher the penalties you have to pay to the government, which is why it’s so important you get everything done as fast as possible.
Who Needs to Pay Taxes in Toronto?
Any person who’s a resident of Canada for any portion of the year is subject to income tax. Moreover, someone who is not a resident of Canada but has income from Canadian sources may be subject to Canadian income tax.
Overall, these are some of the most common cases where people must work with a tax return form in Toronto:
- Employed individuals (T4)
- Self-employed individuals (T2125)
- Non-residents with rental income (Section 216)
- Non-residents with investment income (Section 216)
- Temporary foreign workers and residents with a Canadian work permit
If you’re unsure of what scenario applies to you, make sure to seek help from one of our professionals at the RC Financial Group.
Are There Any Deductions for Your Tax Return in Toronto?
There may be some cases in which you may be applicable for certain deductions in your tax return form. If you fail to include these deductions, you may fail to save up on some money at the end of the year, which can be a problem.
Some common cases that involve tax deductions in Toronto include the following:
- Investment income (T101-T102, T1-CP, T5003-T5004)
- Employment expenses (Form 2200)
- Membership fees
- Moving expenses
- Childcare expenses
- Disability support
- Stock options
- Legal fees
- And more
How Do Tax Credits Work in Toronto?
Additionally, the Canadian government may give you tax credits depending on your personal situation. However, it may be complicated to know which case applies to you, which is why it’s so important to work with a professional tax accountant.
Our professionals at the RC Financial Group also ensure all your tax credits get applied correctly on your income tax return. Some of the most commonly seen credit cases include the following:
- Disability (T2201)
- Adoption expenses
- Medical expenses
- Spousal exemption
- Charitable donations
- Federal political contributions
- Property tax credit (Depending on the case)
- Child fitness credit and arts tax credit
- Student loans/tuition/fees
The Importance of Filing Your Tax Return Correctly
Most people don’t pay attention to their tax returns until it’s too late. Hiring Toronto tax return services are one of the best ways to ensure you’re getting everything done correctly, saving you from a lot of headaches along the way.
First, if you’re able to file your income tax return correctly, you’re going to be able to claim your tax deductions much easier. Keep in mind that if you’re seeking to get tax exemptions, you must fill out your tax return form for that particular fiscal year.
Additionally, if you’re looking to apply for any kind of loan, your bank company may request a record of your filing returns so that they can check your income. Some credit card companies even request your proof of income tax return before they issue a card for you.
It’s important to note that the Canadian tax system is based on mandatory compliance, meaning that you’re required to fill out your returns on time. In essence, whether you feel comfortable showing your tax income statements to your bank, you’re still required to fill them out by the government.
Even if you earn less than the lowest federal income tax rate in Canada (which was set to $13,229 in 2020), it may still be a good idea to fill out your tax return form since it can prevent further issues.
Finally, filling out your return shows the Canadian government that you’re a responsible person, making it easier for you to enter into subsequent transactions. Overall, if you want peace of mind regarding your financials, it may be best for you to start your tax return process with a professional as soon as possible.
Remember that the RG Financial Group offers different tax return services in Canada. Regardless of what you may need, our professionals are likely to help you each step of the way.
Can You Go to Jail for Not Filing Taxes in Canada?
While most people in Toronto fill out their annual returns honestly, some businesses and individuals do their best to avoid paying taxes. Keep in mind that many legal consequences come from doing this, so it’s best not to follow these individuals.
Overall, tax evasion happens when a business or individual ignores tax laws and avoids paying taxes entirely. According to the Canada Revenue Agency, these evaders tend to report less income than they truly earn to avoid taxes.
As Section 238 of the Income Tax Act states, you may have to pay a fine between $1,000 and $25,000 if you incur tax evasion. Additionally, these offences could also result in a full year in prison.
On the other hand, Section 239 of the Income Tax Act states that tax evaders may have to pay from half up to double the amount they were trying to avoid in taxes. Overall, not filing your tax returns is a bad idea.
Get the Help You Need for Your Tax Return in Toronto!
As professional accountants, we understand how challenging it is to keep your financials in check. Keep in mind that it’s okay to ask for help, and our team is ready to help you maximize your earning potential and handle all your financial matters.
Whether you want us to help you do the legwork for you, or you want some advice regarding your tax matters, the RC Financial Group is more than ready to help you!