Pocket-Friendly Partnership Dissolution Tax Filing for Canadian Partnerships

Income tax is tax charged on the income you earn in a year, levied by both the federal government and your province or territory. Rates are graduated, so successive slices of taxable income are taxed at higher rates, and credits such as the basic personal amount reduce the tax calculated. Employment income is taxed through payroll withholding and settled on your T1 return. Quebec residents also file a separate provincial return with Revenu Quebec.

Download and print whatever you need from the forms and publications section of canada.ca, which is the fastest route. For printed copies by mail, use the CRA's order forms and publications service online or order by phone. The income tax package is also stocked at some Canada Post and Service Canada counters during filing season. Forms for the 2025 tax year have been available since online filing opened on 23 February 2026.

Not exactly. A statement of account shows the balance as at the date it was produced, and interest compounds daily on anything still unpaid after that, while payments or reassessments since then are not reflected. Check the current balance in CRA My Account or My Business Account before paying, and pay the figure shown there. If part of the balance is disputed, pay the rest to stop interest running and raise the disputed portion separately.

Report it for the year you earned it, on the return covering that year; there is no minimum below which business income can be left off. A sole proprietor reports on a T2125 filed with the T1: for the 2025 tax year the self-employed filing deadline was 15 June 2026, but any balance owing was still due 30 April 2026. A corporation files a T2 within six months of its fiscal year end.

Income tax on a business is charged on net profit, meaning revenue less reasonable business expenses, not on gross sales. A sole proprietor reports that on the T2125 and a corporation on its T2. Other taxes do not work that way: GST/HST applies to your taxable sales whatever the profit, and payroll remittances follow wages paid. A business loss can usually be applied against other income or carried forward to a later year.

No. A refund happens only when the tax withheld on your slips plus any instalments you paid exceed the tax you actually owe for the year. Employees often see refunds because payroll withholding ignores claims like RRSP contributions, tuition or medical expenses. People with self-employment, investment or several pension incomes frequently owe instead, because little or nothing was withheld. Filing settles the difference either way, and it is also what keeps benefit payments flowing.

Two separate charges apply. Filing late costs 5% of the balance owing plus 1% for each full month the return is late, to a maximum of 12 months. Paying late costs compound daily interest on the unpaid balance at the CRA's prescribed rate, which is reset every quarter. Interest also runs on the penalty itself. Check the current quarterly rate on the CRA's prescribed interest rates page before estimating what you owe.

A refund grows when every slip and receipt reaches the return, so begin by downloading your slips from CRA My Account and matching them against your own records. Then check the items people miss: medical expenses, tuition and its transfer, child care, eligible moving costs, union and professional dues, charitable receipts, and unused RRSP room or capital loss carry-forwards. Prepare both spouses' returns together so transferable credits land in the right place.

The Canada child benefit is a monthly tax-free payment based on how many children are in your care, their ages, whether a child qualifies for the disability benefit, and your adjusted family net income. Amounts are recalculated every July from the previous year's returns, so you and your spouse or common-law partner must both file each year to keep payments flowing. Apply through birth registration or in CRA My Account, and use the CRA's online calculator to estimate the amount.

A write-off is everyday language for claiming a deduction. A legitimate expense reduces the income you are taxed on, so it saves tax at your marginal rate, not the full amount spent. Only expenses incurred to earn income qualify, they must be reasonable, and you need receipts. Some claims are capped by rule: business meals and entertainment are deductible only in part, and the cap applies to the sales tax and the tip as well as the food, with a few exceptions such as employer-hosted events and long-haul driving.

Property tax on the home you live in is not deductible and is not refunded on your federal return. It becomes claimable only where the property earns income or supports a business: a landlord deducts it against rental income, and a self-employed person's work-space-in-the-home claim includes a reasonable share. A salaried employee's work-space claim covers rent and utilities but not property tax; only a commission employee may add property tax and home insurance. Some provinces give an income-tested credit tied to rent or property tax paid.

File the return. Refunds, the GST/HST credit, the Canada child benefit and most provincial credits are all paid out of an assessed return, and they stop when a year goes unfiled. Add direct deposit so the money lands in your account instead of arriving as a cheque. For the 2025 tax year a refund on an electronically filed return generally takes about two weeks.