Low-Cost Multiple-Year Tax Filing for Individuals in Canada

Most people file electronically with software the CRA approves for NETFILE, or have a preparer send the return through EFILE. Paper filing is still accepted and takes far longer to process. Before starting, set up My Account, confirm your direct deposit details, and download the slips the CRA already holds so your return matches its records. For the 2025 tax year the deadline was 30 April 2026, with any balance owing due the same day; a 2025 return not yet filed is late, so file it now to stop the late-filing penalty growing.

CRA online filing for 2025 returns opened on 23 February 2026 and stays open until 29 January 2027. You can prepare a return before the service opens, but it cannot be transmitted, and slips such as T4s and T5s often arrive only in late February. Filing early makes sense if you expect a refund. If you expect a balance owing, you can still file early and pay by 30 April 2026.

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.

Federal tax is the share of income tax that goes to the federal government, charged on taxable income in graduated brackets that are the same everywhere in Canada. Your total bill is that federal amount plus your province or territory's own tax, less the credits you claim. Payroll deductions shown on a T4 cover both layers. Quebec residents receive a refundable abatement of their federal tax because Quebec opted out of certain federal-provincial programs and funds them itself; separately, Quebec also collects its provincial tax through its own return.

For personal tax the identifier is your social insurance number, which appears on your notice of assessment, on T4 slips and in your CRA My Account profile. A business uses its business number followed by the program identifier and reference code for the account in question, shown on CRA business letters, statements of account and remittance vouchers, and in My Business Account. The CRA issues no separate account number beyond these, so quote whichever applies.

Line 42000 is your net federal tax. Work out federal tax on your taxable income using the federal brackets, subtract your federal non-refundable credits, then apply the adjustments in that step of the return - the federal dividend tax credit, any foreign tax credit, and the federal surtax on income earned outside Canada if it applies. For 2026 the federal brackets start at 14% and rise through 20.5%, 26% and 29% to 33%.

Severance normally arrives on a T4 from your former employer: the taxable portion in employment income, and any retiring allowance shown in its own boxes. Enter the slip amounts on your T1 exactly as issued, including the tax already withheld. An amount transferred directly to an RRSP is reported but offset by the deduction, so it is not taxed this year. Legal fees paid to collect severance may be deductible. Keep the settlement letter with your records.

All of it. Tips are fully taxable, so there is no percentage a server is allowed to declare instead of the full amount, whether it arrived by card, in cash, or through a tip pool. There is no special rate either: tips are added to your other income and taxed at your marginal rate. Controlled tips paid out by the employer appear on your T4; direct and pooled tips usually do not, so keep a daily record.

Most dental care is exempt. Diagnosis and treatment provided by a dentist or dental hygienist, including exams, cleanings, fillings, extractions and root canals, carries no HST. Purely cosmetic work with no medical or reconstructive purpose, such as whitening or veneers done for appearance alone, is taxable at 13%. Orthodontic appliances and most dental prostheses are zero-rated. Ask the office to flag any taxable line on the treatment plan before you agree to the work.

Net rental income is the gross rent you received for the year less the deductible costs of earning it, such as mortgage interest, property tax, insurance, utilities, repairs, condo fees, management and advertising, before any capital cost allowance. That net figure goes into your total income and is taxed at your marginal rate. Co-owners each report their ownership share. If expenses exceed the rent, the result is a net rental loss, which can usually reduce your other income.

Returning residents get a limited tobacco allowance free of duty once they have been outside Canada long enough to qualify, and anything above that allowance is charged duty, GST or HST and provincial tax at the border. Tobacco that is not stamped for the Canadian market attracts a special duty even within the allowance, which is why duty free cigarettes still cost something on re-entry. The Canada Border Services Agency publishes the current allowances and rates.