Economical Corporate Continuance for Canadian Businesses

File a T1 return for the year, sending it electronically with CRA-certified software or mailing a paper return. Gather your slips and receipts first and check them against the ones listed in My Account. For the 2025 tax year the filing and payment deadline was 30 April 2026, or 15 June 2026 to file if you or your spouse were self-employed, with payment still due 30 April 2026. CRA online filing for 2025 returns closes 29 January 2027.

For 2025 returns filed in 2026, most online returns are processed in about two weeks, and a non-resident return can take up to sixteen weeks. A paper return runs on a considerably longer standard because it is handled manually. Those timeframes assume a complete return that is not pulled for review. Register direct deposit and track progress in CRA My Account rather than waiting on a posted cheque.

As the rules stand for the 2025 tax year filed in 2026, the late-filing penalty is 5% of the balance owing plus 1% of that balance for each full month the return is late, to a maximum of 12 months, so 17% at worst. It rises to 10% plus 2% per month for up to 20 months, a 50% maximum, but only where the CRA formally demanded the return and had already charged a late-filing penalty for any of the three preceding tax years. Interest compounds daily.

A small business corporation is a Canadian-controlled private corporation that uses substantially all of its assets in an active business carried on mainly in Canada. The label matters because it opens access to the small business deduction, which for 2026 applies the 9% federal rate to the first $500,000 of active business income, and to the lifetime capital gains exemption on a share sale. Holding companies and passive investment corporations usually fail the asset test.

An exempt supply is a sale that GST/HST does not apply to at all, and the supplier cannot claim input tax credits on the costs of making it. Typical examples are long-term residential rent, most financial services including interest and insurance, many health and dental services, child care, and most services provided by public sector bodies. Exempt sales also stay outside the $30,000 small-supplier threshold test, which for 2026 counts taxable revenue only.

Corporate income tax is tax a corporation pays on its own profit, separate from the tax its owners pay on the wages or dividends they take out. For 2026 the federal rate is 9% on the first $500,000 of active business income for a small Canadian-controlled private corporation and 15% on income above that, with each province adding its own rate; Ontario's combined general rate is 26.5%. It is reported on a T2 return.

Yes. Tips are income whether they come as cash, on a card, or out of a pooling arrangement, and they are reportable even when no slip shows them. Controlled tips that run through the employer appear on your T4 with tax, CPP and EI already withheld. Direct and pooled cash tips are not withheld on, so you add them to your return yourself and may owe a balance. Keep a daily log and set money aside.

Yes. Paid parking in Ontario is a taxable supply, so 13% HST applies to lot, garage, meter and app-based parking and to monthly parking rentals. Municipal meters and hospital lots charge it too, usually included in the posted rate. Parking supplied to a tenant as part of a long-term residential lease can be exempt with the rent. If you park for business and are registered, the HST is generally recoverable as an input tax credit.

A new assessed value or municipal rate applies for the tax year the municipality sets it for, not from the day you receive the notice. Provincial assessment bodies value properties as at a fixed valuation date and phase increases in over a cycle, then councils set the annual rates, which appear on the final bill rather than the interim one. A reassessment after a renovation or a change in use can be billed back to its effective date.

No. Only one claim for the amount for an eligible dependant is allowed for each dependant, and only one per household in a year, so separated parents cannot both claim the same child. Where two or more children live with each parent under a shared arrangement, each parent may claim a different child. A parent required to pay child support for that child generally cannot claim the amount. The dependant's net income reduces what you can claim.

Start with the spouse or common-law partner amount, which is at its largest when your partner's net income for the year is nil. There is still no joint return, and your partner should file anyway: filing keeps benefit payments such as the GST/HST credit and the Canada child benefit flowing, and it creates the record needed to transfer unused credits like tuition or the disability amount to you. Donations and medical expenses can sit on your return.

Filing is required whenever tax is owing for the year, when the CRA asks you to file, or when part of a benefit such as OAS has to be repaid. Even with no tax owing, most retirees should still file. The GST/HST credit, the Guaranteed Income Supplement, provincial credits and age-related amounts are all calculated from the filed return, and a missed year can interrupt those payments until the return goes in.