Chart of Accounts

Current and prior-year forms and publications are free to download from canada.ca, and tax software builds most of them for you as you enter your information. You can also order a paper package by phone or pick one up at participating postal and service outlets during filing season. Which forms apply depends on your situation: a T1 with your slips for employment income, T2125 for self-employment, a T2 for a corporation, T1-ADJ to change a return already filed.

Income tax starts once taxable income passes the basic personal amount, and a separate provincial or territorial amount applies on top, so the break-even point shifts every year with indexation and differs by where you live. Look up the current amounts on the CRA site or in the year's return package. Credits for tuition, disability, pension income or dependants push the point higher. Filing can still be worthwhile or required with no tax owing, for benefits and credits.

A tax credit reduces the tax you owe, whereas a deduction reduces the income the tax is calculated on. Non-refundable credits, such as the basic personal amount or tuition, can bring tax down to nil but pay nothing beyond that. Refundable credits, such as the GST/HST credit, are paid out even when no tax is owing. Almost every credit is claimed on the return, so filing is what releases the money.

Usually because the pay for that period is low enough that the basic personal amount covers it. Payroll annualises each cheque, so part-time or irregular hours can produce zero income tax while CPP and EI still come off. Other causes are a TD1 claiming large credits, a claim of exemption from withholding, or being paid as a contractor rather than an employee, in which case nothing is withheld and the tax is yours to set aside and remit.