Ontario Tax Forms

These are the Current Year Tax Forms for residents of Ontario.

Current Year Ontario Schedules:

• Schedule 1 – Federal Tax
• Schedule 2 – Federal Amounts Transferred from Your Spouse or Common-law Partner
• Schedule 3 – Capital Gains (or Losses) in Current Year
• Schedule 4 – Statement of Investment Income
• Schedule 5 – Details of Dependent
• Schedule 6 – Working Income Tax Benefit
• Schedule 7 – RRSP Unused Contributions, Transfers, and HBP or LLP Activities
• Schedule 8 – CPP Contributions on Self-Employment and Other Earnings
• Schedule 9 – Donations and Gifts
• Schedule 11 – Tuition, Education, and Textbook Amounts
• Schedule 13 – Employment Insurance Premiums on Self-Employment and Other Eligible Earnings

Provincial Information and Forms:

• Information Sheet – Residents of Ontario
• Provincial Worksheet – Ontario
• Form ON428 – Ontario Tax
• Form ON479 – Ontario Credits
• Form ON-BEN – Application for the Ontario Trillium Benefit and the Ontario Senior Homeowners’ Property Tax Grant
• Schedule ON(S2) – Provincial Amounts Transferred from Your Spouse or Common-law Partner
• Schedule ON(S11) – Provincial Tuition and Education Amounts

Income

Income is described as all the payments of any type paid to you or on your behalf.

Income, non-taxable.

• Canada Child Tax Benefit (CCTB) payments
• Child assistance payments and the supplement for handicapped children paid by the province of Quebec
• Child Support if agreement or court order is after April 30, 1997.
• Gifts: in most cases
• Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments
• Inheritances: in most cases
• Life insurance policy death benefit payments: most amounts received from a life insurance policy following someone’s death
• Lottery winnings
• Social Assistance Payments (SA), but you must still include it on your tax return to ensure that any benefits you may be entitled to are calculated properly
• Workers Compensation Benefits, but you must still include it on your tax return to ensure that any benefits you may be entitled to are calculated properly

Income, taxable.

• Apprenticeship incentives
• Bond income
• Business income
• Capital gains
• Child support if agreement or court order is prior to May 1, 1997
• Cleric’s housing allowance
• Commission income from sales, self-employed
• Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) child benefits
• Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) death benefits
• Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) disability benefits
• Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) lump-sum payments
• Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) survivor benefits
• Dividends from taxable Canadian corporations
• Earnings…employment income
• Earnings on life insurance policies
• Employment Insurance (EI) benefits
• Employee profit sharing plans
• Farming income
• Fishing income
• Foreign income: business income
• Foreign income: currency exchange rates
• Foreign income: dividends, interest
• Foreign income: employment income
• Foreign income: pension income
• Foreign income: rental income
• Goods and Services Tax/Harmonized Sales Tax (GST/HST) and Quebec Sales Tax (QST) rebates
• Group term life insurance plan premiums paid
• Guaranteed investment certificates: bank accounts, term deposits, & guaranteed income certificates
• Home Buyers’ Plan (HBP) repayments
• Investment income
• Interest income
• Lifelong Learning Plan (LLP) income
• Net partnership income
• Net federal supplements
• Old Age Security pension income
• Pension splitting income
• Professional income, self-employed
• Registered Education Savings Plan (RESP) income
• Registered Retirement Income Fund (RRIF) income
• Registered Retirement Savings Plan (RRSP) income
• Rental income
• Retiring allowances…severance pay
• Royalties
• Salary
• Saskatchewan Pension Plan (SPP) payments
• Spousal Support
• Stock options income
• Stocks income
• Supplementary unemployment benefit plans
• Tips
• Trust income
• Universal Child Care Benefit (UCCB) income
• Wage-Loss Replacement Plan (WLRP) income
• Wages

Income Tax for Non-Residents

As a non-resident of Canada, you still may be required to pay income tax if you receive income from Canadian sources or you are deemed a resident.
Residency status:

You are a non-resident for tax purpose if:

• You normally, or routinely live in another country or you are not considered a Canadian resident
• You do not have residential ties with Canada and you live outside Canada throughout the tax year or you stay in Canada for less than 183 days.

You are a deemed resident for tax purposes for the entire year if:

• Stayed in Canada for 183 days or more in that tax year.
• You do not have residential ties with Canada
• You are not considered a resident of another country under the terms of a tax treaty.

You are a deemed non-resident for tax purposes if:

• You are a factual or deemed resident of Canada for tax purposes and a resident of another country according to a tax treaty Canada has signed. You are considered a resident there.

Your tax obligation:

The type of tax you may have to pay and the requirements to file an income tax return depend on the income you received. There are two types of income that a non-resident can receive that is subject to taxes.

Part XIII Tax – you do not file a Canadian return, except in two situations…

This type of tax is deducted from the types of income listed below. You want to make sure the correct amount is deducted so it is vital that you inform the Canadian payer if you are a non-resident and the country of your residence.

The most common types of Part XIII tax:

• interest and dividends;
• rental and royalty payments;
• pension payments;
• Old Age Security (OAS) pension;
• Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) benefits;
• retiring allowances;
• registered retirement savings plan (RRSP) payments;
• registered retirement income fund (RRIF) payments;
• annuity payments;
• management fees.

Interest received from Canada savings bonds and treasury bill are not subject to Part XIII tax. If you receive income that is subject to Part XIII tax, the Canadian payer must deduct Part XIII tax when the income is paid. Part XIII tax is deducted from your final tax obligation to Canada. Part XIII tax is non-refundable, so do not file a Canadian tax return unless you elect to file. Business Tax Deductions & Business Expenses You can deduct any reasonable current expense you paid or will have to pay to earn business income. The expenses you can deduct include any GST/HST you incur on these expenses less the amount of any input tax credit claimed. You cannot deduct personal expenses. List of Common Business Expenses Listed below:

• Advertising expenses
• Allowance on eligible capital property
• Bad debts
• Business start-up costs
• Business taxes, fees, licenses, dues, memberships, and subscriptions
• Business-use-of-home expenses
• Capital cost allowance
• Computer and other equipment leasing costs
• Convention expenses
• Current or capital expenses
• Delivery, freight, and express
• Fuel costs
• Insurance
• Interest
• Leasing costs
• Legal, accounting, and other fees
• Maintenance and repairs
• Management and administration fees
• Meals and entertainment
• Motor vehicle expenses (automobile)
• Office expenses
• Other expenses
• Prepaid expenses
• Property taxes
• Rent
• Salaries, wages, and benefits
• Supplies
• Telephone and utilities
• Travel

Business Tax Filing & Tax Forms

To report your Business or Professional Income and expenses you will need to complete Form T2125. This form has a section for business activities such as a store or repair shop, and another section for Professional activities such as an accounting practice.

Form T2125, Statement of Business and Professional Activities

You have to complete a separate form for each business or professional activity you operate. For more information, see IT1206R, Separate Businesses.

For further topics for reporting your business income and expenses like:

• Completing Form T2125 – Statement of Business & Professional Activities
• Getting Form T2125 – Statement of Business & Professional Activities
• Industry codes – Industry codes list to be used when completing the form T2125
• Capital cost allowance – How to deduct the cost of capital property over the years
• Eligible capital expenditures – Definitions, calculations, election and replacement property
• Important Dates – Due dates for filing your returns and making your payments. Establishing a fiscal year-end and calculating installment payments.
• Penalties
• Other Forms and Publications

Click CRA link: CRA Reporting your business income and expenses

Self-Employment Taxes, Deductions & Tax Forms

If you are self-employed, you are considered to have a business. If this is the case, you may need information specific to your situation. You first must determine if your business is a sole-proprietor, a partnership, or a corporation.

If you have a sole-proprietorship, or partnership, your income will be reported on the T1 general return using form T2125.

If you have a corporation, you need to complete and file a T2 tax return. This return is completely separate from your personal taxes.

If you are carrying on a business or engaged in a commercial activity in Canada, you are required by law to keep adequate records. These records will help determine your tax obligation, and document any business deductions claimed.

Tax Installments

Installments are periodic income tax payments that individuals have to pay to the Canada Revenue Agency on certain dates, to cover tax that they would otherwise have to pay in a lump sum on April 30 of the following year. Installments are not paid in advance; they are paid throughout the calendar year in which you are earning the taxable income.

You may have to pay your taxes in installments if not enough income tax was withheld from your income.

If the CRA has determined that you might have to pay your taxes in installments, they will send you an Installment Reminder, the suggest amounts you need to pay and the dates the payments are due.

The installment threshold for individuals has increased to $3000 or $1800 if you were a resident of Quebec.

To see when installment payments are due, click on the following link for “Installment payment due dates”

Income Tax Refunds

When to expect your tax refund:

Four to eight weeks for a paper return – CRA does not even begin to process returns until mid-February. So, do not call before mid-March, even if you filed your return in January.
If you filed your return on or before April 30th wait four weeks before calling.
If you filed you return after April 30th wait eight weeks before calling.

E-file – If you electronically file your return it could be processed in as little as eight business days but wait at least three weeks before you call.

You can follow up on your refund on the Internet by accessing My Account, or by telephone by calling the Telephone Information Phone Service (TIPS) at 1-800-267-6969. If you are calling the TIPS line, you will need to have a copy of your return handy to answer questions.

Tax Reviews & Tax Audits

Simple Operating Solutions will do everything possible…with your help…to minimize the chance that you will be subject to a tax return review by the CRA.

Types of Reviews:

• Pre-assessment Review Program: The CRA reviews deductions and credits claimed by the taxpayer before issuing a Notice of Assessment or a refund as the case may be. The peak period for Pre-assessment Reviews is February to July.
• Processing Review Program: The CRA reviews deductions and credits claimed by the taxpayer after issuing a Notice of Assessment or a refund as the case may be. The peak period for Processing Reviews is June to November.
• Matching Program: The CRA compares information on a taxpayer’s tax return to the information provided by third-party sources such as employers and various financial institutions. Items of particular interest to the CRA include verification of employment income; investment income; Canada Child Tax Benefit (CCTB); the Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit; Guaranteed Income Supplement (GIS); Registered Retirement Savings Plan (RRSP) deduction limit; spousal-related claims including child-care expenses, provincial tax credits, and provincial tax reductions. The peak period for Matching Program reviews is September to March.

Common reasons that trigger tax return reviews by the CRA:

• Failure to respond to a request by the CRA for information within the time specified.
• Failure to notify the CRA of mailing address changes; a high percentage of taxpayers involved are students.
• Failure to provide all required information slips and/or information slips referred to on the taxpayer’s tax return.
• Failure to make a complete and accurate disclosure of retiring allowances (separation pay) received or transferred to a Registered Retirement Savings Plan (RRSP).
• Failure to follow the rules that govern Registered Retirement Savings Plan (RRSP) deductions…to provide official receipts for amounts contributed (for paper tax returns) and a completed and filed Schedule 7 “Registered Retirement Savings Plan (RRSP) Unused Contributions, Transfers, and Home Buyer’s Plan (HBP) or Lifelong Learning Plan (LLP) Activities” for amounts contributed.
• Inappropriate claim for Annual Union, Professional, or Like Dues.
• Inappropriate claim for Moving Expenses.
• Inappropriate claim for Support Payments made.
• Inappropriate claim for Northern Residents Deductions.
• Inappropriate claim for eligible dependent amount.
• Inappropriate claim for infirm dependent 18 years of age or older amount.
• Inappropriate claim for caregiver amount.
• Inappropriate claim for interest paid on a student loan.
• Inappropriate claim for tuition fees.
• Inappropriate claim for Education and Textbook amounts.
• Inappropriate claim for transferring of Tuition, Education, and Textbook amounts.
• Inappropriate claim for Medical Expenses.
• Inappropriate claim for Public Transit amount.
• Inappropriate claim for Federal Foreign Tax Credit amount.
• Inappropriate claim for Ontario Credit-Occupancy Cost amount.

Income Tax Evasion

Income Tax Evasion involves the taxpayer deliberately ignoring a part of the Canadian income tax laws. The vast majority who commit tax evasion are under-reporting their income or claim expenses that are non-deductible or overstated. Tax Evasion in Canada carries criminal consequence and the taxpayer will face prosecution in criminal court.

Failure to File Income Tax & Penalty for Not Filing Taxes

If you owe tax for the current tax year and do not file your return on or before April 30, then the CRA may impose penalties and interest. They will charge you a late-filing penalty. The penalty is 5% of your current year balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months. Your late-filing penalty may be higher if you were charged a late filing penalty in any of three previous years. Simple Operating Solutions strongly suggests that, even if you cannot pay the entire amount on April 30, that you still file to avoid the late filing penalty.

I am prepared to help you. Please contact Simple Operating Solutions for more information.

Filing Late Tax Returns & Penalties for Late Tax Returns

Interest

If you have a balance owing for the year, you are charged compound daily interest starting May 1 on any unpaid amounts owing. This includes any balance owing if your return is reassessed. In addition, you will be charged interest on the penalties starting the day after your return is due. The rate of interest you are charged can change every three months. If you have amounts owing from previous years, they will continue to charge compound daily interest on those amounts. Payments you make are first applied to amounts owing from previous years.

Late-filing penalty

If you owe tax and do not file your return on time, you will be charged a late-filing penalty. The penalty is 5% of your current tax year balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months. If you were charged a late-filing penalty on your return for any of the previous three years your late-filing penalty for this year may be 10% of your current tax year balance owing, plus 2% of your current year balance owing for each full month that your return is late, to a maximum of 20 months.

Canada Income Tax Filing Deadlines & Dates

Canada Child Tax Benefit and Universal Child Care Benefit payments:

• January 20
• February 20
• March 20
• April 20
• May 19
• June 20
• July 20
• August 18
• September 20
• October 20
• November 20
• December 15

Child and Family Benefits Calculator

Ontario Trillium Benefit (OTB)

• January 10
• February 10
• March 10
• April 10
• May 10
• June 9
• July 10
• August 10
• September 8
• October 10
• November 9
• December 8

Filing deadlines:

• April 30 (most filers)
• June 15 (self-employed filers and their spouses or common-law partners)
• June 30 (TFSA return)

GST/HST credit payments:

• January 5
• April 5
• July 5
• October 5

Installment payments due:

• March 15
• June 15
• September 15
• December 15
• December 31 (farmers and fishers pay their yearly installment payment)

RRSP contribution deadline:

• March 1

Filing Income Taxes

You may file your tax return with the Canada Revenue Agency (CRA) by Internet or by mail.

By Internet options: NETFILE or EFILE. The NETFILE option is for a taxpayer who wants to prepare his/her own tax return and send it electronically directly to the CRA. The EFILE option is for a taxpayer who has his/her tax return prepared by a registered electronic filing service provider…such as Simple Operating Solutions…who then sends the completed tax return to the CRA electronically on behalf of the taxpayer. Both options require that the tax return be prepared using one of the commercial tax preparation software packages or Web applications certified by the CRA to meet system requirements.

By mail: Mail your completed paper tax return to the CRA tax center serving your region using the envelope included in your tax package.

Who Has to File Income Taxes

Who has to file income taxes:

• You have a balance owing on your tax return.
• You received a request to file a return.
• You and your spouse or common-law partner elected to split pension income.
• You sold property or realized a taxable capital tax gain.
• You are required to repay Old Age Security (OAS) or Employment Insurance (EI).
• You have not repaid all of the amounts you withdrew from your Registered Savings Plan (RRSP) for a Home Buyers Plan or Lifelong Learning Plan.
• You have to contribute to the Canada Pension Plan (CPP).
• You are currently receiving Working Income Tax Benefit (WITB) advance payments and would like to continue receiving these benefits.

You still may want to file if any of the following apply.

• You want to receive a refund.
• You want to apply for the Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit.
• You or your spouse or common-law partner wants to begin or continue receiving Canada Child Tax Benefit.
• You have incurred a non-capital loss and you want to be able to apply it in other years.
• You want to carry forward or transfer the unused part of your tuition, education or textbook amounts.
• You want to report income that you could contribute to your Registered Retirement Savings Plan (RRSP) so that you can keep your RRSP deduction limit for future years.
• You want to carry forward the unused investment tax credit.
• You are applying for the Ontario Energy and Property Tax Credit.

General Income Tax & Benefit Package

Your General Income Tax and Benefit package includes a copy of the guide, the income tax return, related schedules, and provincial or territorial schedules, information and forms (except Quebec). You may get your tax package on the Internet by clicking the following link for CRA Forms, by phone or in person from any postal outlet or Service Canada office between February and early May.

Canada Income Tax Guide

The Canada Revenue Agency releases a new document every year titled, the General Income Tax and Benefit Guide, this guide is a compilation of all five sections on the T1 General Return. This return is what a majority of Canadians will file each and every year to report income and deductions to arrive at an end result of either a refund or a balance owing to the CRA. The Guide follows the format of the T1 General Return, going from line 101 Employment income to line 485 balance owing. It also discusses a variety of different subjects and refers you to other sources of information to help with the completing of the T1 Return.