Why File a Tax Return? Tax benefits and credits available

One of the points I raise in my seminars is that there are actually benefits to filing a return. It’s a myth that you are obligated to file a return every year. In fact, you are not required to file a return every year unless CRA asks you to do so. However, you can miss out on benefits, and CRA isn’t in the habit of reminding you of this. I have compiled a list of advantages waiting for you.

Tax benefits and credits available

• GST credits
• Child Tax Benefit
• Refundable medical expenses
• Certain re-training plans
• Certain pension benefits
• Social assistance
• Workers’ compensation
• Federal supplements
• Excess tax paid
• Excess CPP and E.I. contributions
• Employee GST rebates
• GST input tax credits (mainly for businesses)
• Certain provincial tax credits, depending on your residence

Note: To obtain the above payments, in most cases a yearly tax return must be filed with the appropriate documentation and completed forms. I always recommend consulting a professional to maximize your benefits while complying with current regulations!

The most common reason for filing a return is to get a refund, and over 50% of yearly filers expect one. If you regularly get back over $2,000 a year, you should consider lowering your tax deductions. If you owe over $2,000 a year, you will likely be expected to make quarterly instalments of $500 or more. When your return is prepared, your excess CPP and EI contributions are calculated and refunded.

Certain tax benefits, such as GST, Child Tax, and other federal/provincial benefits, can only be obtained by filing a return. I have had clients come to me because payments have stopped and they have been asked to file in order to continue receiving them. Regular filing by the end of April of each calendar year will eliminate this.

Certain government payment programs, such as pension plans, social assistance, etc., usually require regular filing so that benefits are not interrupted. Again, regular filing by April prevents interruption. Speak to your tax professional at the beginning of each year, and make an appointment once all your information is ready.

If you are self-employed or claiming certain employment/commission expenses, I list GST on most business-related expenses. The idea behind the GST in 1991 was that businesses would not pay it, so they are required to apply for a refund of the GST they paid the previous year. Depending on the class you fit into, your tax professional should be familiar with this.

For further Tax related matters, discuss our corporate lawyer Toronto, ON. Or find us or read client reviews about Shaikh Law Corporation at google business.