The Canadian Government has given Canadian citizens a number of ways to file their taxes. Some people may prefer to have an accountant do the work for them, but there are also many that choose to do it on their own. The T1 General Return is one way in which Canadian citizens can file personal income tax information with the Canada Revenue Agency (CRA). It details personal financial information like income, provincial and territorial taxes, deductions, credits etc. In this article, we will discuss how you should go about filing your Canadian Income Tax return and what documents you need before doing so!
The T1 General Return is also known as the Income Tax and Benefit Return. The CRA website will have a downloadable T1 General Return Package. You need to select the province in which you lived for the year. You can also use a program that you can purchase that will walk you through each phase of the return and the T1 will be automatically filled from the information you enter.
The T1 summarizes the full return including the total income, net income, deductions, credits and tax due. This form is used to apply for the Canada Child Benefit or GST/HST credits.
The new-look on CRA package in 2020 has some notable changes such as more pages and larger font. In fact, it doubled in size from four pages to eight. Also, some of the line numbers now have five digits instead of the three or four you may be used to. The change is intended to facilitate the use of software packages available. Some of the alterations include the use of plain language as much as possible, more white space, and larger font.
Page 1 of the T1 General Return still asks for many basic personal information questions like name, province, marital status. Page 2 now requests details about any tax-exempt income under Indian Act and whether or not you need to file a T90 in this instance. On the whole, it should be pretty much the same as with RRSP contributions, childcare, net, and taxable income.
Page 3 deals with the following:
Other changes include the ability to pay the balance using PayPal and to check how much time remains for the CRA to finish processing your return.
When you're filing your taxes, be sure to attach the federal tax information on page 1 of Schedule 1. The CRA also requires that you include Form 428 - Provincial or Territorial Tax for any provinces or territories in Canada. Include this with Page 3 and any receipts, invoices, income statements from work, etc., if these are required.
Page 4 deals with the bottom line of a refund or tax due, the direct deposit information, and the Ontario Opportunities Fund.
When filling out your annual tax return, which includes the T1 General Return and all its accompanying forms like federal income tax, provincial taxes, deductions, and credits, etc., you have two choices. The first option is to go old school to complete this task by using paper and pen. You can also download Netfile software from www.cra.gc.ca/getready. With this, you can install it on your PC and have all the forms at your fingertips. This software has a charge associated with it.
The second option is to reach out to an accountant. Even though this tends to come with a fee, the expert that you hire will know all of the tax laws and get you as many deductions and credits as possible for your income in order to minimize your tax burden. Next year when it is time to file again, you will already have established a relationship with your accountant and it will be much easier to deal with this annual obligation.
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