Budget-Friendly US Form 1120-S Filing for Canadian Businesses and Individuals

For the 2025 tax year the filing and payment deadline is 30 April 2026. If you or your spouse carried on a business, the return itself is due 15 June 2026, but any balance owing is still due 30 April 2026. Interest runs on unpaid amounts after the payment deadline, and a late-filed return with a balance owing also attracts a late-filing penalty. Filing on time keeps benefit and credit payments flowing.

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.

A refund is the tax already paid minus the tax actually owed. Add the income tax withheld on your slips to any instalments you paid, work out tax payable on your total income after deductions and credits, and the difference comes back if the first figure is larger. Large refunds usually trace to over-withholding on employment income, RRSP contributions, or credits transferred to you. Run the numbers through the CRA's or a commercial estimator before you file.

For the 2026 tax year, federal rates are 14% on the first $58,523 of taxable income, 20.5% from there to $117,045, 26% to $181,440, 29% to $258,482, and 33% above that. Each rate applies only to the income inside its own band, so moving into a higher bracket does not raise the tax on the income below it. Provincial or territorial tax is added on top.

Yes. Employment Insurance benefits are taxable income and must be reported on your return. Service Canada issues a T4E slip showing the benefits paid and the tax already withheld, and that withholding is often less than the rate that ends up applying, because it takes no account of employment income earned earlier in the same year. Many claimants therefore owe a balance at filing. If your income for the year is high enough, part of any regular benefits may also be repayable — the repayment never touches maternity, parental or sickness benefits, and it does not apply where you have not received regular benefits in the previous ten years.

It costs money if you owe. The late-filing penalty is 5% of the balance owing plus 1% for each full month the return is late, to a maximum of twelve months, with compound interest on top. If you are due a refund there is no penalty, but benefit and credit payments can stop until the return is filed. File even without the money to pay: filing on time stops the penalty and only interest runs.

Most corporations pay no capital tax at all in Canada. The federal large corporations tax and the general provincial capital taxes were phased out, so an ordinary operating company is outside the system entirely and needs no exemption. What survives is provincial capital tax on financial institutions such as banks, trust and loan companies and insurers, each province setting its own threshold and deduction. If your corporation is not a financial institution, check the relevant provincial ministry of finance page to confirm.

It means the sales tax that applies where the sale takes place. Federal GST is 5%. In Ontario the HST is 13%; in New Brunswick, Newfoundland and Labrador and Prince Edward Island it is 15%; Nova Scotia is 14% from 1 April 2025. British Columbia adds 7% PST and Saskatchewan 6% on top of GST, Manitoba adds 7% RST, and Quebec charges 9.975% QST on the pre-GST price for 14.975% combined. Alberta and the territories have GST only.

Sign in to My Account or My Business Account, open your profile and edit the telephone number there; the change applies immediately. Without online access, call the individual or business enquiries line and verify your identity, or send the change in writing to your tax centre. Keep the number current, because the CRA uses it for identity verification, multi-factor sign-in codes and contact about assessments, so a stale number can lock you out.

Look at three things. Income first: a raise, a second job, a bonus, self-employment or investment income can move you into a higher bracket or leave too little withheld. Second, payroll deductions reset each January as the CPP and EI limits are indexed, and CPP2 applies to earnings above the main ceiling. Third, credits or benefit amounts claimed last year may no longer apply. Compare this notice of assessment with last year's, line by line.

Mostly by claiming what the law already allows: deducting genuine business expenses, taking capital cost allowance on equipment and buildings, carrying losses to other years, and paying the small business rate on active income. A Canadian-controlled private corporation pays the federal small business rate of 9% on its first $500,000 of active business income for 2026, against a federal general net rate of 15%. Multinationals also choose where profit is reported, which transfer-pricing rules police.

Canada has no general dependant exemption of the kind used in the United States, but you may claim the spouse or common-law partner amount where you supported a partner with low net income. The credit is reduced dollar for dollar by that partner's net income and disappears once it passes the threshold for the year, so both returns should be prepared together. A partner with an impairment may also qualify you for the Canada caregiver amount.