Investigate The Type And The Quality Of The Support You Can Expect
Support might be more important to some taxpayers. Freelancers or those with more complicated tax situation, like those with multiple sources or income like rental or investment income, may feel that they require a bit more hand holding. Some free tax filing services offer phone support for an additional fee. While most free or pay what you like services do not offer human telephone support, they may offer email or chat support. There will likely be striking differences between the quality of both telephone and email support of the various companies. Before choosing, find a software that hires staff thats well versed on Canadian taxes and able to communicate with you in your native tongue, whether its English, French, or Chinese during tax season, some tax preparation software companies staff up with seasonal helpers thousands of miles from Canada, who, no fault of theirs, arent exactly the ideal correspondents when youre white knuckling through your return. So check their website or reach out to any prospective service and get the lowdown on their support. Keep in mind some totally free tiers will offer limited support and you may have to pay additional fees for additional support.
While wait times may be long , the CRA provides a toll free number for individual tax enquiries: .
An Intl Students Guide To Filing Taxes In Canada
Nothing is certain but death and taxes, goes the saying. If youre an international student in the Land of Maple Leaf, you may want to learn how to do a tax return in Canada or risk getting into serious trouble.
Learning to file your taxes is a big step into adulthood, and its critical that you understand what your obligations are under Canadas tax system. Failing to fulfil your tax obligations could result in a penalty or even interest on any unpaid amounts.
We wouldnt be doing you any justice if we didnt offer some guidance. Below is a summary of some of the general things you should know about your filing your tax return in Canada:
American Opportunity Tax Credit
The American Opportunity credit covers expenses for students who are in their first four years of college. The credit is worth up to $2,500, and it can be claimed by a parent, spouse or student who is not claimed as a dependent who for tuition, fees, or textbooks.
The credit is partially refundable. So, if the credit is worth more than your tax liability for the year, you’ll get a refund check for 40% of the remaining amount up $1,000 for each qualifying student. That should be enough to get you to complete a tax return if you don’t otherwise have to file one.
As with the EITC and child tax credit, the IRS has an online tool to help you figure out if you’re eligible for the American Opportunity credit. It will also help you determine if you can claim the Lifetime Learning credit or the tuition and fees deduction .
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B Hire And Work With A Tax Preparer
While it’s never been easier to do your own taxes using software, as your financial life gets more complex you might wonder if you’re missing something and should get someone to prepare and help file your taxes. If you have a business or a healthy side gig, or you just want help understanding all of the forms, you might seek out a professional’s guidance.
» Find a local tax preparer for free:See who’s available to help with your taxes in your area
If you don’t want to meet in person with a tax preparer, theres a way to file taxes without leaving the house. A secure portal lets you share documents electronically with a tax preparer. Typically, the preparer will email you a link to the portal, youll set up a password and then you can upload pictures or PDFs of your tax documents.
What To Bring To Your Accountant At Tax Time
Youll need all this information and documentation whether you prepare your tax return yourself or if you decide to use a tax professional. The difference with the professional is that youll have to take all pertinent information with you to your appointment or gather it together in advance to send through fax or electronically. Youll also need some additional documentation if youre using a tax professional for the first time.
Your tax preparer will require identifying information for you, your spouse , and your qualifying dependents, if applicable. This means Social Security cards, although you can typically take a copy of your most recent years tax return instead. This will detail all your identifying information unless youve since acquired another dependent who wasnt listed on that return.
Of course, you wont have to bring all of this with you if youre using the same professional youve used before. Theyll already have everything at their fingertips.
Its a good idea to take your previous years tax return with you to meet a tax professional, even if you have Social Security cards for everyone in your family. This should give your tax preparer an accurate picture of your personal tax situation, in addition to the identifying information it includes.
While it may seem like a lot of paperwork, gathering and organizing it will be worth it, especially if your tax situation is complex and requires a great deal of documentation.
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Although You Might Not Be Required To File A Tax Return It Might Be Wise To File One Today Anyway Here Are A Few Reasons Why
Filling out tax forms is a pain in the you-know-what. So why on earth would anyone file a tax return if they don’t have to? Well, actually, there’s one very important reason why you might get a big, fat check from the government.
People with income under a certain amount aren’t required to file a tax return because they won’t owe any tax. But if you qualify for certain tax credits or already paid some federal income tax, Uncle Sam might owe you a refund that you can only get by filing a return. Think about that for a minute!
If you want to know more, here are 9 reasons why you might want to file a tax return even if you don’t have to. Even though dealing with taxes can be a real drag, it’s probably worth it if you wind up with a much fatter wallet in the end.
Federal Tax Return Filing Requirements :
Filing Status and Age at End of 2020
Income Required to File 2020 Return
Single Under 65
How And When To File Your Tax Return
Learn how to fill out your return using tax preparation software or on paper.
The deadline for filing personal income tax returns and paying outstanding income tax is . After April 30, penalties and interest start to apply to any outstanding balance owed.
If you are self-employed or filing for someone who has passed away, please see the CRAs website for filing deadlines.
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Other Circumstances That Require You To File
If you are self-employed, you are required to file taxes if you earned more than $400 in self-employment income.
If you pay special taxes, then you must file even if you dont meet the filing threshold. Special taxes include additional taxes on qualified retirement plans or when you must pay taxes on tips you did not report to your employer.
In addition, you must file taxes if you or anyone in your household enrolled in health coverage through the Healthcare.gov Marketplace and you received premium tax credits in 2021.
If you have special tax considerations, you may want to use the IRS interactive tool to determine whether you need to file.
Information About Income Received
- interest and dividend statements: Form 1099-INT, Form 1099-DIV, or bank statement
- pension or other retirement income: Form 1099-R
- Social Security income: Form SSA-1099
- unemployment income: Form-1099-G. Note: A New York State Form 1099-G statement issued by the Tax Department does not include unemployment compensation. If you received unemployment compensation in 2021, including any income taxes withheld, log in to your Department of Labor account using your NY.gov ID. Then, select Unemployment Services and View/Print your 1099-G.
- any other documents showing additional incomedifferent versions of 1099 exist for different types of income statements, deposit slips
Helpful tip: If you are receiving unemployment benefits, consider having tax withheld from these payments to avoid owing taxes when you file your federal and New York State income tax returns. New York State unemployment insurance benefits and any of the special unemployment compensation authorized under the Coronavirus Relief Act are considered taxable income. By law, the New York State Department of Labor must report these benefits to the IRS and to the New York State Tax Department.
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A File Taxes Online With Tax Software
If youve used tax software in the past, you already know how to prepare and file taxes online. Many major tax software providers offer access to human preparers, too.
TurboTax, H& R Block, TaxAct and TaxSlayer, for example, all offer software packages or support options that come with on-demand, on-screen or online access to human tax pros who can answer questions, review your return and even file taxes online for you.
The IRS Free File program can get you free online tax preparation software from several tax-prep companies, including major brands. You must have less than $72,000 of adjusted gross income to qualify.
» MORE:See our picks for the year’s best tax filing software
Are My Social Security Benefits Taxable
As a very general rule of thumb, if your only income is from Social Security benefits, they wont be taxable, and you dont need to file a return. But if you have income from other sources as well, there may be taxes on the total amount.
If youre married and file a joint return, both spouses must combine their incomes and Social Security benefits when figuring taxable amounts. This applies even if the spouse did not have any benefits.
The IRS offers a worksheet to calculate taxable benefits.
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Who Is Required To File An Income Tax Return
If you are new to Canada or if you are just entering the workforce, you may be wondering if filing a Canadian Income Tax return is a necessity, and if so, when do you have to file your first tax return?
The Canada Revenue Agency does require annual filing for most citizens but there are exceptions, so lets have a look at who is required to file a Canadian T1 General tax return and when.
Do Working Children Pay Taxes
As with any Canadian citizen, your child isnt generally required to file a tax return if they have no tax owing. Usually, the amount earned by a minor child doesnt hit the basic personal credit amount meaning they wont owe tax on their earnings. There are some exceptions.
Regarding tax returns for a child, how much the child earned from what activities will determine if your child needs to file taxes. Dont worry well help you figure out what you and your child need to do.
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Do I Need To File Even If Im Not Required To By Filing Status Age And Income Level
In some cases, yesyou will still need to le a tax return if any of the following apply:
- You owe any taxes, such as alternative minimum tax, taxes on a retirement plan distribution, household employment taxes, and Social Security and Medicare taxes that were not withheld from income.
- Repayment of the First-Time Homebuyer Credit.
- You received a distribution from a health savings account, Archer MSA, or Medicare Advantage MSA.
- You had at least $400 in self-employment income.
- You earned $108.28 or more from a church or qualified church-controlled organization that is exempt from employer Social Security and Medicare taxes.
- You received an advance payment of the Premium Tax Credit for health insurance bought from a health insurance marketplace. You should receive Form 1095-A with the amount of the advance payments.
- Advance payments of the Health Coverage Tax Credit were made for you, your spouse or a dependent. You should receive Form 1099-H with the amount of the advance payments.
- You are required to file Form 965-A for an elected installment payment.
- You are claimed as a dependent, but your income exceeded the filing requirement threshold.
Documents That Support Tax Deductions
Identifying the documents youll need to claim certain tax deductions can be an arduous process. Ideally, youve been collecting them all year long as you paid certain expenses.
Its not necessary to provide your receipts to the IRS unless youre audited, but youll need them to ascertain how much you can claim for various deductions, and youll want to keep them on hand just in case. While you can take the easy way out and simply claim the standard deduction for your filing status, youll have to know how much you spent on qualifying expenses if you decide to itemize instead. Common itemized deductions include charitable giving, state and local property and income taxes, medical expenses, and health insurance.
A full list of available itemized deductions appears on Schedule A, which you must complete and submit with your tax return if you elect to itemize.
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The American Opportunity Tax Credit
This credit covers up to $2,500 for qualified college expenses and is partially refundable. If the credit brings the amount of tax you owe to zero, you can have 40% of any remaining amount of the credit, up to $1,000, refunded to you.To be eligible for the AOTC, students must be within their first four years of higher education and be enrolled at least half time at some point during the tax year.
To claim the AOTC, you must file a federal tax return with a completed Form 8863 attached to your Form 1040 or Form 1040A.
Make Sure Youve Got Online Access To The Cra
Every Canadian taxpayer hoping to file online needs to be able to access My Account through the CRA, which the agency explains is a secure portal that lets you view your personal income tax and benefit information and manage your tax affairs online. There are two ways to sign in. The first is you have an account with one of the sixteen big banks the CRA calls sign in partners. If you can access your account online, you can easily use that sign in info to get directly into the My Account section. The second method is by using a CRA user ID and password to log into the CRA website. If you dont have a login and password register for one here. To confirm you are indeed you, theyll ask for your social insurance number as well as one of the figures from a past T4 slip.
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Qualifying Rules If You Can Be Claimed As A Dependent
You must file a tax return for 2020 under any of the following circumstances if you’re single, someone else can claim you as a dependent, and you’re not age 65 or older or blind:
- Your unearned income was more than $1,100.
- Your earned income was more than $12,400.
- Your gross income was more than $1,100, or $350 plus your earned income up to $12,050, whichever is greater.
Married dependents who are not age 65 or older or blind are subject to these filing requirements plus one more: They must file if their gross income was at least $5, and their spouse files a separate return and itemizes deductions.
Social Programs Are Available To Help
On top of the tax companies that can help with tax filings, Espinoza said there are programs out there for some people who help Canadians file their taxes for free.
Depending on your individual circumstances, the Canada Revenue Agency hosts free tax clinics where a team of volunteers can help you with filing your taxes.
Espinoza, who used to volunteer at these clinics, said theyre typically focused on lower-income individuals and people with disabilities who may need some help.
There’s usually an income threshold and you’re evaluated and basically you can go and get your tax return done for free by volunteers, by accountants like me or someone who’s qualified to do the tax return, he said.
It’s a great program and oftentimes I think a lot people don’t know about it.
The T1 General tax form for 2015 is shown in this recent photo. THE CANADIAN PRESS/Graeme Roy
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Who Should File A Tax Return
Most U.S. citizens and permanent residents who work in the United States need to file a tax return if they make more than a certain amount for the year.
You may want to file even if you make less than that amount, because you may get money back if you file. This could apply to you if you:
- Have had federal income tax withheld from your pay
- Made estimated tax payments
- Qualify to claim tax credits such as the Earned Income Tax Credit and Child Tax Credit