Affordable T1135 Foreign Property Reporting for Individuals in Canada

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.

The refund is normally released with the assessment itself, so a direct deposit follows soon after the notice appears in My Account, and a cheque takes longer because it travels by post. If nothing arrives, read the notice: the CRA may have applied the refund against an outstanding balance, family support arrears or another government debt, or held it while the return is reviewed or an earlier year remains unfiled. My Account shows the payment date once it is issued.

Sign in to CRA My Account and read the balance on the account overview, or check the notice of assessment issued after your return is processed. It states the balance owing or the refund and any interest charged. Until the return is prepared there is no figure to check, so an estimate means adding up your slips and deductions. Interest runs on an unpaid balance from the payment deadline, and the CRA will consider a payment arrangement.

Start by claiming everything you are entitled to: RRSP contributions, child care, moving and employment expenses, self-employment costs, tuition, medical expenses, donations and the credits that follow your family situation. Timing helps too, such as deferring a bonus or triggering a capital loss against a gain. Pension income splitting and spousal RRSP contributions move income to a lower-rate spouse. For a business, incorporating and planning how money is drawn out matters. Leaving income unreported is evasion, not planning.

An exemption trust is an American estate planning structure that preserves a deceased spouse's federal estate tax exemption, so there is no direct Canadian equivalent. Canada levies no estate or inheritance tax. Instead, capital property is treated as sold at fair market value on death and the resulting gains are reported on the final return, while a qualifying transfer or spousal trust can defer that tax until the surviving spouse dies. Families with United States ties need advice on both systems.

Canadian-source income is income whose origin is in Canada: employment carried out here, a business carried on here, rent from Canadian real property, gains on taxable Canadian property, and Canadian pension, dividend and interest payments. It matters most for non-residents, who are taxed only on Canadian-source amounts, often by withholding at the payer rather than by filing. Residents are taxed on worldwide income instead. A tax treaty can reduce the withholding rate for your country.

No. Age creates no exemption. Income tax is withheld from a young worker’s pay in the usual way, though many earn less than the basic personal amount and recover the withheld tax by filing a return. EI premiums apply at any age. CPP contributions begin with the month after the worker turns 18, so no CPP comes off before then. Filing anyway is worth it, because earned income builds RRSP room for later.

Income tax on individuals, corporations and trusts; consumption taxes, where GST is 5% and provinces add HST, PST, QST or RST; payroll levies such as CPP and EI; property tax charged by municipalities; and targeted charges including excise duties and land transfer tax. Capital gains sit inside income tax, with one-half of the gain included for 2025 and 2026. Federal, provincial and municipal governments each levy their own, which is why rates differ by province.

Generally no. Exports of goods and most services supplied to a non-resident are zero-rated, so no tax is charged, you still report the sale, and you still claim input tax credits on your costs. Exceptions apply, including services relating to real property in Canada and supplies to a non-resident who is registered here. Within Canada the place-of-supply rules follow the customer, so an Ontario business billing a Quebec customer charges 5% GST rather than 13% HST, using 2026 rates.

You can claim the spouse or common-law partner amount for a year in which you supported your partner and their net income was low. It is a non-refundable credit that shrinks as their net income rises and disappears once that income passes the limit set for the year, so a full claim generally means a partner with little or no income. Unused tuition, age, disability and pension credits may also transfer to you.

Employment income is everything your employer pays or provides for your work: salary or wages, overtime, bonuses, commissions, employer-controlled tips, and the value of taxable benefits such as a company vehicle or certain allowances. It shows in box 14 of your T4, before deductions. Add every T4 you receive, plus tips the employer did not report, then subtract only the limited employment deductions you qualify for, such as union dues or approved work-space costs.

Statutory deductions are the amounts an employer must withhold from pay by law: federal and provincial income tax, Canada Pension Plan contributions (Quebec Pension Plan in Quebec) and Employment Insurance premiums, plus the Quebec Parental Insurance Plan for Quebec employees. The employer also pays its own share of CPP and EI. Everything is remitted on a set schedule and reported on T4 slips. Union dues, pension contributions and benefit premiums are contractual, not statutory.