Approximately 70% of the Canadian government's income comes from taxes imposed on individuals and businesses alike, the rest comes from tariffs, fees, and investments.
Federal taxes are collected by the Canada Revenue Agency (CRA), formerly known as "Revenue
Canada" or the "Canada Customs and Revenue Agency". Under "Tax Collection Agreements", CRA
collects these taxes then remits to the provinces:
The Canada Revenue Agency is the Canadian equivalent of the United States Internal Revenue Service. If you are a resident of Canada you are required to file a Canadian income tax return provided you earned money in Canada. There are three ways to file your return in Canada.
- Canadian Income Tax Software Programs: Software can be used online or downloaded and installed on your computer. The Canada Revenue Agency website has a list of software choices that can help you prepare and NetFile your Canadian T1 income tax form. There are fee to use tax software programs like TurboTax Canada [Formally QuickTax] that may work for you depending on your income level. You may also choose to print and mail your return to your tax center instead of filing it online.
- Filing Manually: You may obtain a T1 personal income tax form to file your Canadian income taxes manually. These forms can be obtained from a post office or through the Canada Revenue Agency website. Check to make sure your getting the right form for your territory. A non-resident form is available if you are not a Canadian resident. To complete your return refer to the instructions included along with the T1 form. You can then either mail it to the appropriate tax center as listed on the Canada Revenue Agency website, or telefile if you have a simple return by calling (800) 959-1110.
- Professional Tax Accountant: You can choose to hire a professional income tax preparer to complete and file your Canadian tax forms for you. To do this you need to gather up all your receipts and related tax documents. The cost for professional tax service can vary greatly, so it's wise to get a quote before committing to any financial obligation.
The truth is, I used to always seek professional help to complete my income tax return, but with today's software anyone can complete their own return regardless of tax knowledge or math skills. I must admit that the first time I ventured into preparing my taxes myself I was pretty intimidated at first. I decided to give it a try anyway and to my surprise, it was quite a simple process with fully guided support from TurboTax.
The fruits of this challenge were far more rewarding than I had ever expected, I ended up with a much higher refund for the next two years in a row. The Canadian tax system leaves a lot of room for individuals to lower the income tax you have to pay. I would have to say that by preparing my own return there was a lot of tax knowledge I gained into how to properly prepare for - and get bigger refunds on future returns.
You can use the Registered Retirement Savings Plan (RRSP) to lower your taxes simply by committing to saving for your future. Instead of paying the money into the government, you get the chance to pay it toward your future! High taxation prohibits you from withdrawing your savings while you are still working, but when you're not, the RRSP is really worth it.
Canadian Tax Software is the solution to income tax preparation and tax return filing for Canadian residents. With today's tax software, tax preparation is far less inexpensive along with being easy and convenient. There are many companies that provide tax software solutions. These include both online tax preparation software and desktop computer installed tax software.
Tax help for Canadian Provinces & Territories: Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland, Nova Scotia, Ontario, Prince Edward Island, Quebec, Saskatchewan, Northwest Territories, Nunavut Territory, Yukon Territory, - and US Taxes for any of the US states and overseas