Doing your taxes is an important part of becoming an adult. Taxes pay for many things, likes roads, police services, health care, employment insurance, and more. Filing your taxes allows you to get tax refunds, qualify for GST refunds and also helps build your credit.
What do I need prepare for my taxes?
First you need the basics:
- Legal name
- Your current address
- Your date of birth
- Decide if you want to vote in elections
- Your Social Insurance Number (SIN)
- Your income
What's my income?
Basically think of it this way: if you got money somehow you have to declare it.
There are a few exceptions in BC:
1.Any GST/ HST payments/ cheques
2.Any child tax benefits
3.Any money you got as a payment from a vehicle accident
4.Any money you got as a result of being a victim of a crime
6.Most gifts and inheritances
7.Any money you receive for disability due to war service
8.Most payments from a life insurance policy due to someone’s death
What can I declare?
The most common things that youth declare are:
- Income (jobs, income assistance, disability, employment insurance etc)
- School (tuition or paid student loan interest)
- Savings (RRSP's and/ or Tax-Free savings accounts)
- Expenses (Large medical costs, childcare expenses, children’s fitness tax credit, children's art credit)
If you own property or have your own business there are other things you will need to declare, so have an accountant help you with your taxes.
What are the forms I need?
The government calls tax forms slips.
1)T4’s: your income from working. You should get one from every employer you’ve had in the last year. So, if you’ve moved you need to make sure you’ve updated your address with your former employers. Previous years' T4s can be accessed here.
Insider TipInsiders tip: Most tax software now features auto-fill! These automatically load your tax forms that have been sent to the CRA. Easy!
2)T4E’s: this is what you get if you’ve received Employment Insurance in the last year.
3)RC62: Universal Childcare Benefit
4) RRSP contribution slip - you get this from the bank you have your RRSP with
5)T2202A: your post-secondary school should give you this for tuition
6)T5007, income assistance or disability income slip.
I'm First Nations are there different tax rules for me?
In some cases yes.
- you must provide proof of registration with Aboriginal Affairs and Northern Development Canada (AANDC).
You must have earned the income while living on a reserve and from the reserve.
If both things above are true then you are tax exempt from the following:
- Any property you own on reserve (that has existed before July 1, 1867). If you're not sure check with your band.
- If you earned income from your reserve. For example, let's say you're an artist and you sell your art to people on your reserve then you don't have to declare it as income, but if you sell it off reserve to someone then you are suppose to declare it as income. For more information check out this link.
- If you received employment assistance like employment insurance, income assistance, disability etc.
- If you are a full time student and received scholarships, fellowships, or bursaries, or are receiving AANDC’s Post-Secondary Student Support Program or its University and College Entrance Preparation Program.
There are a few other reasons like income earned from savings, retirement etc. For more information check out the CRA's website
Ok, I have everything I need how do I file taxes?
We suggest using this online free, Vancouver based, tax software called Wealthsimple Tax Did we mention it's FREE???
You can file your 2020 and prior year tax returns using this software.
Check out this video from last year to learn more:
If you owe any money make sure to pay it back on time otherwise CRA will charge you interest!
Is there anything else I can claim?
Yes, you can claim the following things:
What Childcare expenses can I claim?
There are very specific circumstances that you can declare childcare expenses.
You can declare if:
- Both you and your partner/ spouse are or if you are a single parent and are:
- Not at home because you are working;
- Have your own business and you need to work;
- attend school under the conditions identified under Educational program; or
- carry on research or similar work, for which you or the other person received a grant.
- If someone you know, but is not related to you is taking care of your child(ren). Remember you will need this persons social insurance number to declare the cost which means the government knows they made money. So, make sure this person is aware they will have to declare this on their tax return.
You can't declare if:
- If you are looking for work
- If someone related to you through blood, adoption or marriage is looking after your child(ren).
What kind of child care can I claim?
- Any individual (not related) providing child care services;
- Day nursery schools and daycare centres;
- Educational institutions, for the part of the fees that relate to child care services;
- Day camps and day sports where the goal of the camp or sports is to take care of your child ; or
- Boarding schools, overnight sports schools, or camps where the child spends the night
What's a child's fitness tax?
It's a tax break you get if your child is in a fitness program.
A fitness program means it must:
- be ongoing (last at least eight consecutive weeks or, in the case of children's camps, five consecutive days);
- be supervised;
- be suitable for children; and
- require significant physical activity.
Significant amount of physical activity means:
The activity must increase the child’s heart rate, plus one or more of:
- muscular strength,
- muscular endurance,
- flexibility, and/or
The following situations do not qualify:
- activities where riding in, or on, a motorized vehicle is an essential part of the activity;
- self-directed (unsupervised) activities;
- activities that are part of a regular school program like P.E. class; or
- sports programs in schools.
- food and accommodations related to being part of a fitness program
- watching your child(ren) play videogames
- equipment purchased in order to participate in the sport. If the equipment is part of the registration fee then it’s ok. For example, some registration forms might include jersey, then it’s ok.
Make sure to keep all your receipts because you’ll have to submit them.
What is the child tax benefit?
The Canada Child Benefit is a tax benefit available to families, single parents or caregivers of children under the age of 18 in Canada.
Information on the Canada Child Benefit (CCB)
- You can apply as soon as your child is born
- Or as soon as a child starts living with you
- Tax-free monthly payment made to eligible families
- Helps with the costs of raising a child
- For children under 18 years of age.
- To get your CCB you need to file your taxes every year, even if you don’t have income
- CCB is paid over a year through July to June based on your tax return from the year before
- The person who is mainly responsible for the care and upbringing of the child should apply for the CCB
You can download the Canada Child benefit application here
What is the Disability Tax Credit?
The disability tax credit (DTC) is a non-refundable tax credit that helps people with disabilities or people who take care of people with disabilities.
- It is meant to reduce the amount of income tax they may have to pay each year
- An individual may claim the disability amount once they are eligible for the DTC
- This amount includes a supplement for persons under 18 years of age at the end of the year
- DTC helps relieve disability costs, since these are unavoidable additional expenses that other taxpayers don’t have
Who is eligible for the Disability Tax Credit?
You are eligible for the DTC only if the government approves Form T2201, (Disability Tax Credit Certificate).
- A medical practitioner has to fill out and certify that you have a severe and prolonged impairment and must describe its effects
- Medical practitioners could be a family doctor, psychiatrist, nurse practitioner
You can download the form here
What are medical costs?
There are hundreds of things that can be claimed, some need prescriptions and some don’t. You can claim things ranging from crutches to prescriptions. Remember to keep your receipts because you will need to submit them. Check out this detailed list.
Do I get all my money back for my medical expenses?
No, you only get a percentage of your expenses back. The calculation is this: you take your total expenses and subtract 3% of your annual income and that’s what you would get back.
1.last year you had $2000 in medical expenses and you made $22,600.
2.Calculate 3% of $22,600 = $678
3.Minus $678 from $2000 = $1322.
4.Which means you would receive $1322 back from your medical claims
Do I have to pay taxes on an inheritance?
No, but if you are on income assistance, disability or employment insurance you need to tell them that you received that money. If you are not honest about it and you are caught there are penalties starting with being cut off from the service.
How do I get a GST cheque?
The government automatically calculates how much your payments are and will send you cheques.