Affordable Capital Dividend Election Assistance for Canadian Businesses

Online banking is the simplest route: add the CRA as a payee, select the account and tax year precisely, and pay from your chequing account. CRA My Payment takes debit card payments, and pre-authorised debit can be scheduled in My Account or My Business Account for a single amount or a run of instalments. Corporations and GST/HST registrants use the same channels under their business number. Keep the confirmation number and allow several days for the payment to post.

A T2 corporate return is due six months after the fiscal year end, whichever month that falls in. The balance owing comes earlier: two months after year end, or three months for an eligible Canadian-controlled private corporation claiming the small business deduction. Filing late costs 5% of the unpaid balance plus 1% per month for up to 12 months. For tax years beginning after 2023, electronic filing is mandatory for essentially all corporations whatever their gross revenue — the old $1 million threshold no longer applies — and paper-filing a return that had to be filed electronically carries a $1,000 penalty.

Most tax saving comes from a short list of levers: contributing to an RRSP or a spousal RRSP, holding investments inside a TFSA, FHSA or RESP so growth is sheltered, claiming every deduction and credit you actually qualify for, and splitting income where the rules allow, such as pension income splitting. Business owners add expense timing and salary versus dividend planning. Order matters, so decide before year end rather than at filing time.

Yes. Tips and gratuities are income and must be reported, whether they reach you through your employer or straight from the customer. Controlled tips your employer distributes appear on your T4 with payroll deductions already taken. Direct and cash tips usually appear on no slip at all, so you report them yourself on your T1 from your own records. Keep a daily log, because the CRA can estimate unreported tip income.

Scholarships, fellowships and bursaries are reported on a T4A, yet most students pay no tax on them. A full-time student in a qualifying programme who is eligible to claim the education amount is generally exempt on amounts received for that programme. Part-time students get a limited exemption tied to tuition and required materials. Amounts paid for services performed, such as a paid assistantship, or received as a research grant are treated differently and can be taxable.

The simplest route is your bank’s online bill payment, choosing the CRA payee that matches the tax type and year. The CRA’s My Payment service takes Interac Online and Visa Debit, and you can set up a pre-authorized debit inside My Account. Third-party card processors work but charge a fee. Select the correct account and period so the money is not applied elsewhere, and pay by the deadline, since interest runs from the day after.

A financial transaction tax is a levy charged on the value of a trade in securities or currency, paid each time an asset changes hands. Canada does not have one, and it has no securities transaction tax of the sort India applies. Canadian investors are taxed on results instead: capital gains at the one-half inclusion rate for 2025 and 2026, plus tax on dividends and interest. Trading fees you pay are commissions, not tax.

Start with the notice that created the balance. If a slip or claim was simply missed, request a change to the return online in CRA My Account or on a T1-ADJ, which is quicker than a formal dispute. To challenge the CRA's position, file a notice of objection by the deadline shown on your notice of assessment, with reasons and documents. Relief from penalties and interest is a separate request on form RC4288. Interest keeps running, so arrange payment meanwhile.

You pay tax of 1% per month on the highest excess amount in the account for each month the excess is there, and this remains the rule for 2026. Unlike an RRSP there is no buffer, so the tax starts on the first dollar over. It keeps running until you withdraw the excess or new January room absorbs it, and you have to file a TFSA return. The CRA can waive the tax for a reasonable error.

Federal income tax, GST/HST and excise duties flow into general revenue, which funds transfers to the provinces for health care and social programmes, benefits such as the Canada child benefit and old age security, defence, federal departments and interest on the public debt. Provincial income and sales taxes fund schools, hospitals and municipal transfers. Canada Pension Plan and Employment Insurance premiums sit in separate accounts and are not part of general revenue. The federal budget publishes the yearly split.

Car insurance is deductible only to the extent the vehicle earns income. A self-employed person or a corporation deducts the business-use share of insurance alongside fuel, repairs, licence fees, interest and capital cost allowance, prorated by business kilometres over total kilometres driven in the year. An employee needs the employer to certify that using their own vehicle is a condition of the job. Commuting does not count, and without a kilometre log the CRA can deny the whole claim.

Travel insurance is only partly claimable. The medical portion of a travel policy generally counts as a private health services plan premium and can be included with your medical expenses, while trip cancellation, baggage and interruption coverage cannot. Ask the insurer to break the premium down, because a single quoted price will not support the claim. Insurance bought for a genuine business trip is deductible against business income instead.