Filing your taxes every year is one of the most important financial habits you can build.
Even if your income is low, you should file.
Note: If you are in a bankruptcy or proposal and want to know how your taxes are affected, click on the menu and go to the relevant bankruptcy or consumer proposal support page for tax FAQs related to your filing.
Why You Should File Your Taxes
Get Your Tax Refund
If you had tax deducted from your pay there is a possibility you’ve overpaid and are entitled to a tax refund. If you are owed money, CRA will not send your refund unless you file.
Many low-income individuals receive refunds due to tax credits and benefits.
Receive Government Benefits
Most federal and provincial benefits are calculated based on your tax return. You must file to receive payments such as GST/HST Credit, Canada Child Benefit, Advanced Canada Workers Benefit and provincial benefits.
Avoid Penalties
CRA does not like it when you don’t file, because they don’t know how much you owe. That’s why they have severe financial penalties for non-filers.
- If you don’t owe taxes, there is no penalty for filing late.
- If you owe taxes, the late-filing penalty is:
- 5% of your balance owing, plus
- 1% per full month you file late (up to 12 months)
If CRA charged you a late-filing penalty in any of the previous three tax years and issued a formal demand to file, the late-filing penalty doubles.
Avoid Interest
If you owe taxes, interest begins the day after the payment deadline (usually April 30).
- Interest compounds daily
- The rate changes quarterly
- Even small balances grow quickly
Filing on time prevents unnecessary interest and stress.
Build RRSP, TFSA and FSHA Contribution Room
Registered savings programs like RRSP, TFSA and FHSA have contribution limits calculated based on your filed income.
No return = no new contribution room.
Peace of Mind
When your returns are filed, CRA has no reason to contact you about missing returns. Filing keeps your record current and reduces stress.
Create a CRA Account (My Account)
Why Create a MyCRA Account?
With a CRA account you can:
- View your tax returns and Notices of Assessment
- See balances owing
- Check benefit amounts and payment dates
- Download T4s and other government slips
- Use Auto-Fill when preparing your taxes
- Update your address
- Register your banking information so CRA can direct deposit your tax refunds
- Set up payment arrangements
- See your RRSP, TFSA, FHSA contribution limits
Note: CRA will not have receipts for:
- Medical expenses
- Charitable donations
- Rent receipts
- Other personal documents
How to Create a MyCRA Account:
Go to the Register for a CRA Account and follow the prompts.
You will need:
- Your social insurance number
- Your date of birth
- Your current postal code
- Your previously filed tax return to enter into the prompts as requested
You can:
- Use a Sign-In Partner (your bank login), or
- Create a CRA username and password directly.
We recommend creating your login directly with CRA so your access is not affected if you change banks in the future.
Once you have an account you can sign in on CRAs login page as well.
File Your Taxes Yourself (Free or Low Cost)
For most people with simple income, filing a tax return is straightforward.
That’s why we recommend filing yourself using certified tax software. If your situation is more complicated (self-employment income, multiple properties, complex investments, etc.), a tax professional may be appropriate.
CRA provides a list of free tax preparation software. Many other programs are available at low cost.
Our advice:
- Ask friends, your Hoyes Michalos trustee, or your credit counsellor what software they recommend.
- Choose one program and use it every year. This makes it easier to carry forward your information.
Avoid “instant refund” offers. You are usually paying a high fee or giving up part of your refund just to receive your money a little sooner. Follow the instructions below and file for yourself instead.
What To Know Before You File
Use Auto-Fill If You Have a CRA Account
If you’ve registered for a MyCRA Account, most tax software can automatically import:
- T4 slips
- T5 slips
- RRSP contribution slips
- Other government-issued tax slips
Auto-Fill saves time and reduces data entry errors.
Gather Receipts That Must Be Entered Manually
CRA will not have:
- Medical receipts
- Childcare receipts
- Donation receipts
- Tuition receipts
- Rent receipts
Keep these organized before you begin filing.
Know Your Deadlines
For most individuals:
- Filing deadline: April 30
- Payment deadline: April 30
If you are self-employed:
- Filing deadline: June 15
- Payment deadline: April 30
Once you’ve filed keep tax documents in one folder (paper or digital). Review your Notice of Assessment when you receive it.
What If You Owe CRA?
Even if you cannot pay in full, file your return on time to avoid penalties.
The CRA website has detailed information about your payment methods including:
- online banking by setting CRA as a payee (like a utility bill). Before sure to select the correct CRA option (taxes owing for YYYY, installments etc).
- paying directly online with CRA’s MyPayment
- Scheduling pre-authorized debit through CRA
- Visiting a teller at a bank or credit union
There are other options on CRA’s website but these are the easiest. We do not recommend using your credit card through a third-party service provider to pay your taxes. This is transferring one debt to another.
Notify CRA Immediately Of Any Changes
Update CRA immediately if you change:
- Address
- Marital status
- Number of children
- Banking information
Incorrect banking information can delay tax refunds, benefits and credits.
All updates can be made through your CRA account.