Budget-Friendly Partnership Registration for Canadian Partnerships

Yes. Rent you receive is taxable income. You report the gross rents, subtract deductible expenses such as mortgage interest, property tax, insurance, utilities you pay, repairs, condominium fees and advertising, and the net rental profit is added to your other income and taxed at your marginal rate. There is no separate rental tax rate. A rental loss can generally offset other income where the property is genuinely rented at fair market value.

A write-off is simply a deductible expense. You subtract it from the income it helped earn, so the saving equals the expense multiplied by your marginal tax rate, not the full amount spent. To qualify, the cost must be incurred to earn business or employment income, be reasonable in amount, and be backed by a receipt. Purely personal costs never qualify, and mixed-use items such as a vehicle or a home office are split by business-use proportion.

A business lets you deduct the real costs of earning income, such as supplies, subcontractors, software and a reasonable share of home office, phone and vehicle costs, so you are taxed on profit rather than revenue, and a loss can often offset other income. Incorporating adds the federal small business rate of 9% on the first $500,000 of active business income for 2026, plus control over when you take money out. Personal spending dressed up as a business expense is not deductible.

Cash tips are taxable income, so leaving them off your T1 understates income and the CRA can reassess the year, charge interest and add a penalty. Where slips are missing it can estimate earnings from deposits, industry norms and lifestyle, which usually costs more than reporting honestly would have. Report the total even though it appears on no slip, and keep a daily tip log so your figure can be supported.

There is a $2,000 lifetime cushion, and it becomes available in the year after the year you turn 18: from then on you can go over your deduction limit by up to $2,000 with no penalty, though that $2,000 is not deductible. Above the cushion, tax of 1% per month applies to the excess for every month it stays in the plan, and the T1-OVP return is due within 90 days of the year end. These are the 2026 rules.

Unsold inventory is not a deduction. Goods still on hand at year end sit on the balance sheet, and only the cost of what you actually sold reduces income, so buying stock in December does not cut that year's tax. Inventory is generally valued at the lower of cost and fair market value, which can support a writedown when goods lose value or become obsolete. Count it at each year end and keep the working papers.

There is no single cut-off. The Canada Child Benefit starts from a maximum per child and is reduced once adjusted family net income passes a first threshold, at a reduction rate that depends on how many children you have, with a different rate applying above a second threshold. A family with several children can still receive something at a fairly high income, while a one-child family phases out sooner. The CRA's child benefit calculator gives your own figure.

Your refund sits at the very end of the T1, in the refund or balance owing section on the last page. Total credits are compared with total payable: a credit balance is your refund, and only one of the two lines is filled in. Software completes it for you. The notice of assessment can still show a different amount if the CRA corrects the return or applies the refund against another debt you owe.

Yes. EI benefits stack on top of any other income for the year, so they can shrink a refund or create a balance owing, because the tax Service Canada withholds is usually less than the rate that applies once the benefits sit above your employment income. Benefits also count in the net income that income-tested credits and benefits are based on. Where the T4E shows a benefit repayment rate, part of the regular benefits must be paid back.

That figure is your payroll deduction rate, not a tax bracket. Canada's federal rates for 2026 start at 14% and rise through 20.5%, 26% and 29% to 33%, and what leaves your cheque blends federal and provincial tax with CPP at 5.95% and EI at $1.63 per $100 of insurable earnings for 2026. Payroll also annualises each cheque, so a bonus or overtime period is taxed as if every period looked the same. Filing squares it up.

Premiums you pay for private health, dental or extended medical coverage count as an eligible medical expense on your T1, which gives a credit rather than a deduction. The employee share deducted from your pay qualifies; the employer's share does not. A self-employed person without an employee plan may instead be able to deduct private health services plan premiums against business income, subject to conditions on who else is covered.

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.