Filing your taxes

Filing your taxes can seem complicated, but it’s important to understand the basics so you can meet your tax obligations, avoid penalties, and receive the tax credits and benefits you’re entitled to.

Income taxes are mandatory payments collected from individuals by the Canada Revenue Agency (CRA). Every Canadian resident (whether they live in the country full-time or part-time) must pay taxes, and so must non-residents who earn income in Canada.

The funds are used by the government to pay for essential services such as police and firefighters, infrastructure such as bridges and streets, and assistance to those in need, such as the unemployed or those with low incomes.

Paying your taxes

You must pay taxes on your income, including wages and interest you earn on investments such as savings accounts or Guaranteed Investment Certificates (GICs). You also need to declare any property, including cash or investments, that you own outside of Canada if it’s worth more than $100,000.

You pay both federal and provincial/territorial income tax. In BC, both types of income tax are included on the same tax return. Depending on how much taxable income you have, you’ll pay a different tax rate. The more income you earn, the higher your taxable rate.

Generally, your return must be filed and your taxes paid on or before April 30. If you choose to file later than April 30, you’ll incur a penalty of 5% of the amount you owe, plus 1% for each month you delay payment to a maximum of 12 months. If you choose to pay later, the CRA will charge interest that’s compounded daily, so the penalty amount will grow very quickly.

If you’re self-employed, you can file on or before June 15, but you still need to pay on or before April 30.

Receiving tax credits and benefits

You may be eligible for a number of tax credits and benefits that help you meet your financial obligations and maintain a fair standard of living.

Child Tax Benefits

Two benefit programs offer financial support to Canadian families: the Universal Child Care Benefit (UCCB) provides tax-free payments of $100 per month for each child under the age of six years, and the Canada Child Tax Benefit (CCTB) provides a tax-free monthly payment for children under age 18.

GST Credit

The Goods and Services Tax (GST) credit is a tax-free quarterly payment that helps individuals and families with low or modest incomes offset all or part of the GST that they pay.

Seniors Guaranteed Income Supplement

The Guaranteed Income Supplement (GIS) provides a monthly non-taxable benefit to Old Age Security (OAS) recipients who have a low income and are living in Canada.

Child Disability Benefit

The Child Disability Benefit (CDB) is a tax-free benefit for families who care for a child under age 18 who is eligible for the disability amount.

Working Income Tax Benefit

The Working Income Tax Benefit (WITB) is a refundable tax credit intended to provide tax relief for eligible working low-income individuals.

Medical expenses

If you have medical expenses that are not covered by insurance and they exceed a certain dollar amount or represent more than 3% of your net income, you can claim them as a tax deduction.

BC Low Income Climate Action Tax Credit

This credit is a non-taxable amount paid to help low income individuals and families with the carbon taxes they pay.

Getting help with taxes

Taxes can be complicated, and many people need help filing their return. If you hire a bookkeeper or accountant, you’ll get personalized service, but you’ll also pay a higher fee. A service like H&R Block will be less expensive, and offers service in a range of languages.

There are several free options:

  • Various neighbourhood houses offers an Income Tax Clinic in multiple languages. Call your local neighbourhood house to book.
  • Acorn Canada offers free income tax advice in multiple languages. Call 604-522-8706 to book.
  • Immigrant Services Society offers free tax clinics in multiple languages. Call 604-684-2561 to book.
  • St. Paul’s Advocacy offers tax advice every Monday. Call 604-683-4287 for more information.
  • 411 Seniors Centre. Call 604-684-8171 for more information.
  • South Granville Seniors Centre. Call 604-732-0812 for more information.
  • Vancouver Aboriginal Transformative Justice Services Society. Call 604-251-7200 for more information.
  • First United Church Community Ministry Society offers services every Wednesday. Call 604-681-8365 for more information.
  • Motivation, Power and Achievement Society offers services for persons with mental disability, every Monday to Friday. Call 604-482-3700 for more information.
  • Sikh Community Resource Centre offers services in multiple languages, every Monday to Friday. Call 604-322-5613 for more information.
  • Tenth Avenue Church offers services in multiple languages, every Saturday. Call 604-876-2181 for more information.

For more clinics in your area, click here.

The CRA offers a free online program to help people understand the Canadian tax system and complete a simple income tax and benefit return. Click here to sign up.