Low-Cost Internal Audit Support for Canadian Businesses

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.

Canada taxes income in graduated brackets, so only the income above a threshold is taxed at that bracket's higher rate and moving up a bracket never reprices the income below it. There is one federal set of brackets and a separate set for each province and territory, and the thresholds are indexed to inflation every year. Look up the current figures for your province on the CRA rate tables rather than relying on an older list.

A non-refundable credit reduces the tax you owe to zero but no further, so any unused part is lost, carried forward, or transferred to a spouse or parent where the rule allows it. A refundable credit is paid to you even when no tax is owed, which is how benefit-style payments reach people with little or no income. Most personal credits on the federal return, including the basic personal amount, are non-refundable.

Because several layers stack on the same income. Federal tax and provincial tax both apply to your taxable income at progressive rates, CPP or QPP and EI come off on top, and GST/HST and provincial sales or fuel taxes apply again when you spend. A bonus, a second job or a lump-sum withdrawal often looks punishing because withholding is calculated as if that payment were your only income. Property tax is separate, set by municipalities on assessed value.

The CRA does call, usually about an unfiled return, a balance owing, a payment arrangement, a benefit review or an audit. A real agent gives a name and office and can point to correspondence already in My Account, and will never demand payment by e-transfer, gift card or cryptocurrency, threaten arrest, or ask for a password. If a call feels wrong, hang up, check My Account, then call the CRA back on a number from its own website.

A laptop is fully taxable at the sales tax rate for the place it is delivered. That means 5% GST in Alberta and the territories, 13% HST in Ontario, 14% in Nova Scotia from 1 April 2025, and 15% in New Brunswick, Newfoundland and Labrador and Prince Edward Island. On top of GST, British Columbia adds 7% PST, Saskatchewan 6%, Manitoba 7% RST and Quebec 9.975% QST. Registered businesses can generally recover the GST or HST paid.

Taxable value is the amount a tax is actually calculated on, after the exemptions and adjustments that apply to that particular tax. For property tax it is the assessed value your assessment authority sets. For sales tax it is the price charged for the supply, though Quebec applies QST of 9.975% to the pre-GST price. For income tax the equivalent is taxable income. Where a value has to be estimated, the usual standard is fair market value on the relevant date.

Personal and living costs never are: your own groceries, everyday clothing, commuting between home and a regular workplace, and home costs without a qualifying work space. In a business, capital purchases are written off over time through capital cost allowance rather than expensed, club dues and most memberships are denied, only a portion of meals and entertainment is allowed, and fines, penalties and interest charged by the CRA are not deductible. Political contributions and donations give credits, not expense deductions.

Usually yes, but read it with the date beside it. The balance shown in CRA My Account is what that account owes as of that date, including interest charged to that point. It moves afterwards: interest compounds daily on an unpaid balance, and a payment, a reassessment or a credit transferred from another account changes the figure. Instalment, payroll and GST/HST accounts are shown separately, so confirm you are looking at the right one.

Life insurance premiums are generally not deductible, whether you pay them personally or through your corporation. The main exception is where a lender requires a policy as collateral on money borrowed to earn business income, in which case part of the premium may be deductible. Group life coverage an employer provides for staff is usually deductible to the business but becomes a taxable benefit to the employee. Confirm the treatment before claiming anything.

Add up every taxable source for the year: CPP, Old Age Security, pension payments, the RRIF minimum plus any extra withdrawal, and investment income held outside registered plans. Apply that year's federal and provincial brackets to the total, then subtract credits such as the basic personal, age and pension amounts. Adjust for pension splitting with a spouse and for Old Age Security recovery if income is high. Tax already withheld on your slips is credited against the result.