What are income tax forms and how can they help you get a refund?
Doing taxes is unlikely to be your idea of fun, but knowing you might get some money back at the end? That could take the sting out of it. To make the task as painless as possible, it helps to be organized. That means knowing which tax receipts you need to watch for, and then ensuring you keep them together once you start receiving them in January.
Income tax slips are official documents issued by a variety of organizations, including employers, financial institutions, government agencies and charities. Together, they provide an official record of your income or expenses and you’ll need them to complete your income tax return, either online or in paper form. However you choose to file, these documents adhere to a format approved by the Canada Revenue Agency (CRA). It’s very important to keep these records safe because not only are they essential for your tax preparation, but they could also be the key to helping you lower your tax bill or get a tax refund.
How to file your taxes in Canada
You’ll need the T1 Income Tax Package to file your taxes in Canada. This set of documents helps organize all the pertinent information from your tax receipts and can help you calculate whether you owe taxes or will receive a refund. If you are filing your taxes online, the T1 package is likely already built into the software. You can also request a paper copy of this package from the CRA online, at post offices and other government buildings.
If you do decide to use tax software or a tax preparation service, you can often file electronically with the CRA. After filing, you will have the option of downloading or printing a copy for your files. If you want to fill out a blank return yourself by hand, you can download it from the CRA and mail it in directly.
Even if your income is below the basic personal amount for paying federal income taxes ($14,398 federally for the 2022 tax year), it might still make sense to file a return. That’s because filing a return enables you to accumulate contribution room in tax-advantaged registered investment accounts, such as a Registered Retirement Savings Plan, among other perks.
Key tax forms in Canada and their purposes
Before you sit down to fill out your T1, make sure you have all your tax slips in front of you. There are scores of official tax forms used in Canada, however, you likely won’t need all of them. Here are some of the most commonly used documents:
Notice of Assessment (NOA):
While for many Canadians, the Notice of Assessment — or NOA for short — is just a summary of your previous tax filing, it’s an important document to keep track of as it includes information you’ll need when you prepare your current tax return. Among other important bits of information, last year’s NOA will tell you what your Registered Retirement Savings Plan (RRSP) contribution limit is for the year. It will also indicate what, if any, unused contribution room you might have in your Tax-Free Savings Account as of the date of the NOA, even though you don’t have to report your income from that account on your taxes. You should receive your NOA a few weeks after you file your taxes. Be sure to review it, as the CRA may make changes to your taxes if it feels you’ve made an error.
T4 Statement of Remuneration Paid:
This is the slip provided by your employer(s) detailing your compensation (pay and benefits) for the year, as well as amounts deducted at source for income taxes, Employment Insurance, Canada Pension Plan, workplace pensions and health insurance plans. If you are doing your taxes for the first time, this might be the only slip other than the return itself that you need.
T4A Statement of Pension, Retirement, Annuity and Other Income:
You may receive one or more T4A slips detailing income from a workplace pension, annuity, Old Age Security, Canada Pension Plan and other sources of income.
T4E Statement of Employment Insurance and Other Benefits
If you received Employment Insurance or related benefits (for example, for parental leave), you will need this slip.
Annuitant Contribution Receipt:
You will need this form if you plan to claim RRSP contributions on your taxes. Your financial institution will provide this document at the start of the year to reflect any contributions you’ve made since the prior year’s contribution deadline. You may also receive additional receipts if you make any last-minute contributions before the RRSP contribution deadline.
T3 Statement of Trust Income Allocations and Designations:
Any time you earn investment income from a personal trust or from a mutual fund in a non-registered account, you should receive this form.
T5 Statement of Investment Income:
If you earned income from non-registered investments, such as stocks, private company shares or a rental property, you will need to include information from this slip on your taxes.
T5008 Statement of Securities Transactions:
This slip reports on the purchase or sale of stocks, bonds or fund units held outside of a registered account for the purposes of allowing you to use the slip information to report income on the T5008 Form that is not reported in other parts of your T1 return.
T5013 Statement of Partnership income:
You may receive this slip because you are receiving income as a partner in a business or if you’ve received income from a unit in a limited partnership.
T2200 Declaration of Conditions of Employment:
This is a form your employer will fill out if you are required to pay for your own employment-related expenses.
T2202 Tuition Enrolment Certificate:
This document is needed to claim tax benefits for the costs of you or a dependent attending an accredited post-secondary educational program.
TL11A Tuition and Enrolment Certificate:
If you’re studying abroad, you will need this form to certify your enrollment and claim post-secondary expenses from any university or post-secondary institution outside of Canada.
T777 Statement of Employment Expenses:
Any salaried or commissioned employee who is required to pay costs related to their employment (not covered by an employer) will need this form to claim employment expenses as a deduction.
T4RSP Statement of RRSP Income:
If you have withdrawn any amount from your Registered Retirement Savings Plan (before it gets converted to a RRIF or annuity by December 31st in the year you turn 71), you will need to include this form when you file your taxes.
T4RIF Statement of income from a Registered Retirement Income Fund:
Similarly, the Statement of RRIF Income keeps track of money paid out from a Registered Retirement Income Fund and must be reported to the CRA.
Where do I find tax slips and forms in Canada?
Many of the tax slips and forms you need will arrive in your mailbox or your email inbox from your employer, financial institution or a government agency. In some cases, you may have to seek out these documents on your own. For instance, rather than sending hardcopies of employment income to your home, some employers are now directing their staff to download the slips from their payment administrator. Forms that represent a personal declaration or that you must fill out yourself can be downloaded from the Canada Revenue Agency.
What will happen if I don’t file a tax return?
For a while, maybe nothing. But sooner or later, due to accounting information shared by your employer or others, the CRA will become aware of your missing reporting. If your return is overdue and you have taxes owing, you may be subject to interest and penalties on top of your arrears. In extreme cases, the CRA has the power to garnish your wages directly from your employer or prosecute you criminally for tax evasion. You may also miss out on certain government benefits such as OAS, GST/HST rebates and the Canada Child Benefit by not filing.
How many years can I go without filing taxes?
None, if you have taxes owing. If you don’t owe any taxes, you have up to 10 years to file a return for the year in question.
How do I know if I will owe taxes?
From the time you start filling out your return using tax preparation software, the program will identify the sum you owe or are owed, based on the information supplied. If income taxes were deducted directly from your paycheque all year and you had no other sources of income, you may not have to pay any more. In fact, you may even be due a refund.
Do bank statements count as receipts?
Official receipts are always preferable to other documentation such as bank statements. If you are unable to prove your tax position, a reassessment may be more likely. In the absence of official documents, bank statements are better than nothing.