Canada Tax Filing 2020

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Written by: Raoul Padilla
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Tax season is here! It’s the time of the year when we hear a lot about W2 forms, deadline of filing and tax obligations. Yes! Tax obligation, it’s the amount you pay on income you receive from sources in Canada. Here’s an easy guideline on what you need to know about Canadian Taxes.

Timeline

  • Canadian Tax filing may start around 2nd or 3rd week of February (Following last year’s timeline).
  • Deadline of filing income tax and benefit returns is on April 30 2020.
  • Self-employed individuals and their spouse or common-law partner have an extended timeline which is until June 15, 2020

Ways to File your Taxes

Online

You can log in or Sign up to Canada Online Portal to view your personal income tax and benefit information and manage your tax affairs. It will also give you option to pay it online.

By Mail

Canada Revenue Agency (CRA) will mail the 2019 Income tax package to individuals who filed their returns on paper last year. It can take up to 10 business days for the 2019 Income tax package to arrive by mail.

By Phone

1-800-959-8281 is the Individual tax enquiries line. When you call, you will receive an estimated wait time to speak with an agent. You can wait in the queue or decide to call back later. You can also get your account balance and the amount of your last payment through a self-serve interactive voice response system

Free Tax clinics

Community volunteers assist individuals with low income and simple taxes file for their tax returns.

Tax Software

There are free and paid softwares that can be link to your Canada’s online portal account where you can manage and pay your taxes.

Personal Tax Changes

  • Working income tax benefit increased for low income workers
  • Reduced tax rates for small business (from 10% to 9%)
  • Employee premiums decreased by 4 cents for every $100.00 insurable earnings
  • Canadian Pension Plan rates increased by 5.1%

Benefits of filing your Taxes Early

  • You will get your tax refund at the earliest time possible.
  • You can use your refund to pay debt faster.
  • Less chance of website technical downtime.
  • You won’t miss any tax benefits.
  • You will have an ample time to make corrections if necessary.

Penalties

  • - If you file your tax late, you will be fined an amount equivalent to 5% of your tax payable plus 1% of your balance owing per month for up to 12 months.

Example:

Your Tax payable is $2000.00 and you’re 6 months late.
= 5% of your $2000 Tax payable is $100 (immediate penalty)
= 1% of $2000 Tax payable is $20 x 6 months
= $120.00 (additional penalty)
= $220.00 (total penalty) + $2000.00 (Original balance)
= $2,220 (Total tax due


2020 Federal Tax Brackets and Marginal Rates



2020 Federal Basic Personal Amount



2020 Ontario Personal Income Tax Brackets and Tax Rates



2020 Combined Federal & Ontario Tax Brackets and Tax Rates Including Surtaxes



  • Marginal tax rate for dividends is a % of actual dividends received (not grossed-up taxable amount).
  • Marginal tax rate for capital gains is a % of total capital gains (not taxable capital gains).
  • Gross-up rate for eligible dividends is 38%, and for non-eligible dividends is 15%.
  • The surtax is calculated before deducting dividend tax credits.

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