Things to consider before filing your taxes

Craig Sebastiano

December 20, 2024

It’s tax season and many people have begun filing their taxes. But if you’re a last-minute filer like most Canadians, there are a few things you should know before you submit your 2023 income tax return.

The deadline to file and pay taxes is on the last day of April

You must file your tax return by April 30, which is a Tuesday this year. If you’re self-employed, you have until June 15 to file your return. However, if you owe the Canada Revenue Agency (CRA) money, you must pay the amount by the end of April even if you’re self-employed. Not filing on time when you owe money can be costly. There is a late-filing penalty of 5% of your balance owing, plus an additional 1% for each month you are late for up to 12 months.

Even if you don’t owe anything, you won’t be charged a penalty if your return is filed late. However, you may face a delay in benefits or credits, such as the Canada child benefit (CCB).

Claim all income

Do you currently have a side hustle as an Uber driver or as a tutor? Are you finding goods at garage sales and selling them on eBay? Are you renting out your place on Airbnb? Do you have a job where you earn tips that aren’t reported on your T4? If you earn income that’s not reported on a tax slip, it’s still considered income by the CRA. Income not reported on a T4 slip should be reported on line 10400 of your return.

Tax brackets have shifted to account for inflation

The Canadian government has adjusted the federal tax brackets for 2023 to account for inflation and to maintain buying power for Canadians as the cost of living increases.

The federal tax brackets for 2023 are:

Taxable Annual Income	Tax Bracket	Tax Rate
up to $53,359	the first $53,359	15%
$53,359 - $106,717	the next $53,358	20.5%
$106,717- $165,430	the next $58,713	26%
$165,430 - $235,675	the next $70,245	29%
$235,675 and up	over $235,675	33%

Keep in mind that you’ll also have to account for your provincial tax bracket, and provincial taxes apply in addition to federal taxes.

Don’t forget to claim credits and deductions

As a tax filer, you’re entitled to a number of tax credits and deductions, such as RRSP contributions, child care expenses, charitable donations, work-from-home expenses, and interest paid on student loans. If you’re employed and also have a side hustle or if you’re self-employed, you’re allowed to write off any reasonable expenses you paid to earn income. You may want to consult a professional to find out what costs are considered reasonable.

Also, pay close attention to new tax credits, such as Canada workers benefit, Canada dental benefit disability supplement, and the Canada Carbon Rebate.

Also read: Four tax credits and rebates for the 2023 tax year - and what to do with them

There are free tax filing options

Sometimes it makes sense to have an accountant or a tax preparation companies do your taxes for you. However, the cost might not be worth it when you have a simple tax situation. If you have just a T4, donation receipts, and RRSP contribution receipts, it may not be worth paying someone to do your taxes for you. There are many free online offerings from TurboTax, Wealthsimple Tax, H&R Block, AdvTax, and GenuTax. If you have a low income and a simple tax situation, you may be able to get someone to file your return for you at a free tax clinic.

Also read: What documents do you need to do your taxes?

Hold onto your receipts and returns

The CRA recommends that you keep any tax slips, receipts, returns, and other related documents for “at least six years from the end of the tax year to which the records relate.” That means you should hold onto your 2023 return and the supporting documents until at least Dec. 31, 2029. Why? Because the CRA may review your return and having receipts will make it easier to support any claims you may have.