Tax filing and returns are a legal requirement for every citizen and resident of Canada. It is the responsibility of individuals and corporations to file their tax returns and pay taxes on time. However, due to the complexity of the Canadian tax system, it can be difficult for people to understand how much they have to pay in taxes. We strive to make things easier for you by providing information about different types of taxes in Canada and how much you should be filing for taxes based on your income and province.
The T1 General form is a tax form filed with the CRA (Canada Revenue Agency) as an annual income tax return. Individuals and business owners such as proprietors and partners use it to report their annual income. The form was introduced to simplify the tax filing process for Canadians. It is a single, general form that can be used for all types of income, such as employment income, investment income, business (proprietorship or partnership) income, and capital gains. With a T1 General Form, you can receive your tax refund back faster than if you had filed using other forms or had not filed at all.
Why Do I Need a T1 General Form Canada?
The T1 General Form is the simplest and most convenient way to report your annual income to the CRA. Consider it a final summary of all other income and tax-related forms you complete for a particular calendar year. As you apply for different services, including the Canada Child Benefit, GST/HST refund tax credits, and others, you will need to provide your T1 general form.
Your lender may ask you to provide T1 General form as you apply for a mortgage or other credit purchase. You can get your T1 income tax package here.
How do you calculate your income?
The T1 General Form is divided into three parts in order to make tax calculations crisp. These are:
- Gross income or revenue: Gross income is a simple sum of all employment incomes, wages, salaries, profits, rents, interest payouts, etc. These figures are obtained from income statements or pay stubs available to you.
- Net income or revenue: You need to sum up all your expenses during the year, including business expenses (proprietorship and partnership), amortization, taxes on purchases, and interest. Subtract this amount from your gross income or revenue to get net income or revenue. You must file an additional T2125 form.
- Taxable income: You need to take out all the allowable expenses from your net income or revenue. The amount thus obtained is your taxable income. Some of the allowable deductions are utility bills, conveyance, rent, etc.
What are the Basic Requirements for T1 General?
The form T1 General is a simplified version of the more complex Canada forms. The form does not require supporting documents. Also, the T1 General Form has sections that require entries from other CRA tax forms. We guide you to help you to save time and avoid mistakes.
- Identification: Here, you need to fill in your particulars, such as your name, address, SIN, and marital status. In case you are filing as a proprietorship or partnership (like Realtor, Insurance Agent or Broker, Mortgage Broker, etc.). If you have more than one business, you must file an additional T2125 form.
- Total income: This is the section where all your income sources need to be declared. These may include one or more income sources like employment income, self-employment income, foreign income, benefits received for your disability, etc.
- Net Income: After you mention your gross income in the section above, you need to declare your net income after deductions. You take out all of your allowable expenses from your total income. You may check the list of allowable expenses here.
- Taxable income: After deducting the expenses, you can set off your losses from your income. The taxable income is the one that is left after taking out expenses. Income thus calculated is taxed per your tax rates for the particular year.
- Refund or Balance Owing: Based on calculations, if you are eligible for a refund, you may mention the same in this section. For refunds, you enter a negative amount value; for balance owing, you mention a positive amount.
How to obtain a copy of T1 General for the previous year?
You file your T1 General form annually along with your annual tax returns. You need to log into your CRA My Account to find your previous year’s T1 General. The CRA website maintains records of your current year and past 11-year T1 forms. For any record further in the past, you will need to call CRA officers and request your copy.
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How to send your T1 General Form?
CRA has made it convenient for you to send your T1 general form online using the NETFILE option. It is the most convenient and rapid method. If you wish to file it offline, you will need to download the T1 form from the CRA website and send it to your nearest office for processing.
Complete your Tax Return right now
Nowadays, we are all too busy to manage our finances and taxes. We don’t have the time to go through all the paperwork, calculate our allowances, and fill in the forms. Luckily, many different options are available to make filing your tax return more accessible and faster. You can use the services of a professional accountant or an online service. With their help, you can complete your tax return quickly and in no time.
Paying Tax Due to the Government
Paying taxes is a responsibility that every individual and corporation has to fulfill. Every year, the government sets up a due date for when people have to pay their taxes. This helps the government to collect all the money it needs to fund its operations. The due date for federal taxes in Canada depends on what type of return you are filing and how many days are left in the year. The T1 General Return is due on April 30th yearly, while T2125 are due on June 15th.