first tax return
 

Hi I have spent the morning researching how to fill out our first tax return in Canada.

I have a few questions

1) We moved here in May 2012, I understand we both have to fill out a form even though I havent earnt since 2011, to be able to carry on claiming tax credits for our boys as hubby works and needs to submit a return and the tax credits are in my name am I right to think this? Or do we do a joint one?

2) We have been informed that we can claim moving expenses for our move to canada, cost of shipping, hotel stay, food ect, not sure how reliable this sorce is and the forms I have looked at are not totally clear to me, does anyone have any insight into this. We are not trying to claim everything we can, we paid a lot of money out when we made the move and it would be lovely to claim some back if we could ;)

3) Are they as hard to fill out as they look! I just downloaded the general income tax and benefit guide and its 63 pages long! oh well it has to be done lol.

Thankyou for any info you may have on this. I have looked at this form and it isent clear to me weather we can claim for expenses when we landed.

http://www.cra-arc.gc.ca/E/pbg/tf/t1-m/README.html

Re: first tax return
 

I do not believe you can claim for your move to Canada. It's not something for new immigrants. That is usually only avail to people moving within Canada for work... (edit, looking at the form you linked, or students)

To be honest, I'd probably pay for someone to do your first return. It has to be submitted in paper anyway.

Next year, once you are "in the system", you can file yourself electronically.

Re: first tax return
 

as far as i remember , no you can't claim your moving expenses for when you move to Canada.
there are certain circumstances when moving within Canada as part of your job etc , but I believe the general consensus is that your initial move to canada isn't eligible

as for the forms, most people use online sofware like Quicktax or HR block etc. Our bank offers a discount on one or other of these packages. Some are free. Or you can pay someone to do it for you. HR block have offices all over the place but never used them so can't say how good they are.

I think I recall that the first year you can't file online , you have to mail it.

most people manage to do there taxes fairly reasonably themselves. Don't be intimidated.

Re: first tax return
 

^^^ the above are correct, you can only claim for moving within Canada for work purposes ( and a very nice return of taxes it was too ).

Re: first tax return
 

You each have to file a tax return. The returns are individual. However, spouses should prepare their returns together as some tax credits can be shared or claimed by either spouse.

Generally no. To claim the moving expenses deduction you have to be tax-resident in Canada both before and after the move.

This comes up quite a lot so it is worth quoting the Income Tax Act:

S248(1) “eligible relocation” means a relocation of a taxpayer where
(a) the relocation occurs to enable the taxpayer
(i) to carry on a business or to be employed at a location in Canada (in section 62 and this subsection referred to as “the new work location”), or
(ii) to be a student in full-time attendance enrolled in a program at a post-secondary level at a location of a university, college or other educational institution (in section 62 and in this subsection referred to as “the new work location”),
(b) both the residence at which the taxpayer ordinarily resided before the relocation (in section 62 and this subsection referred to as “the old residence”) and the residence at which the taxpayer ordinarily resided after the relocation (in section 62 and this subsection referred to as “the new residence”) are in Canada, and
(c) the distance between the old residence and the new work location is not less than 40 kilometres greater than the distance between the new residence and the new work location

except that, in applying subsections 6(19) to (23) and section 62 in respect of a relocation of a taxpayer who is absent from but resident in Canada, this definition shall be read without reference to the words “in Canada ” in subparagraph (a)(i), and without reference to paragraph (b);

Paragraph b) says that the move must be from one residence in Canada to another residence in Canada. There is an exception for someone who is absent from, but resident in, Canada. The intention of this exemption is that people such as military personnel who are posted abroad, but still remain tax-resident in Canada, can benefit from the deduction.

It can be daunting to start with, but it is not that difficult once you get started. And this site is a great resouce if you get stuck. Consider using tax preparation software. You can buy it in Staples and similar stores and there are several on-line versions. These work by asking you a series of plain English questions and, depending on your response, will eliminate all the forms you don't need to complete.

A couple of things to keep in mind.

1) You have to file a hard copy of your tax return for the year you first come to Canada. You can net-file in subsequent years.
2) You have to prorate some tax credits (like the personal amount) for the part of the year you were living in Canada.

Re: first tax return
 

Turbo tax is good, you can get it online. We filed our own the first year, its really very straight forward.
The only complicated bit was because we moved cash over in tranches at different exchange rates, it has to be a gain/loss calculation against the rate on the day you landed.

We had our medicals here, I claimed those back.

Dont forget to keep all receipts for health costs - prescriptions that you have to pay for (after any health insurance you may have has paid a percentage) and all childcare receipts, receipts for sports and summer clubs etc.

Turbo tax asks you questions, you just have to then fill in the boxes and it prints it all out for you at the end - magic!

Oh and Jonboye IS the font of all tax return knowledge! I can speak from experience!

Re: first tax return
 

I second this , he was extremely helpful in helping us sort out our QROPS pensiony thing
(you can tell by the expert use of language that I know what I'm talking about!)

Re: first tax return
 

Thankyou for all your help I feel much better informed
Shame we cant claim but never mind I will look into getting some software thanks again.

Re: first tax return
 

If you want a simple to use and FREE tax software, authorised for use by the CRA, may I suggest http://www.studiotax.com/en/ - I used it last year and it explains everything step by step and suggests things you may not have considered applying for.

:)

Re: first tax return
 

Were these your PR medicals? Did you include them in the medical expenses? I didn't think of that for my 2011 return - I wonder if it's too late now?

Re: first tax return
 

You can file a T1 Adjustment request. Make sure the medical expenses will actually result in a refund before you do.

Re: first tax return
 

For $35 save yourself the stress and hours or work and just hand your envelope of receipts and info over to an accountant. That's what I do and it's the best $35 I will ever spend in any year :thumbsup:

Re: first tax return
 

That is what we do, both hubby and me. Him cos he works from home and we can claim some stuff for that but takes a big load off our minds

Re: first tax return
 

:(

Re: first tax return
 

I would if it would prompt an audit? May be best to just leave it. Although tax refund on 5 PR medicals would still be nice to have.......

Re: first tax return
 

$35 for a tax return - do they spend any more than 10 mins on it?

Re: first tax return
 

For most people that's all that's required if using some software package - although I wouldn't trust an accountant who only charges that much.

Re: first tax return
 

It should not trigger an audit, it is just that it gives them one more chance to look over a return they have already put to bed. If you are going to get some tax back then good, otherwise there is no benefit to you.

The question is: do the costs of the medicals, plus any other medical expenses for the year exceed the lower of 3% of either spouse's net income or $2,052? If so, and that spouse paid tax, then it is worth filing. If the lower earning spouse did not pay tax but the expenses exceed the lower of 3% of the higher earner's net income or $2,052, then it is worth that person filing for an adjustment.

Re: first tax return
 

I pay $50 for myself and $75 for hubby which appears to be standard where I live

Re: first tax return
 

I did my hubbys for him the other year and calculated somewhere around $6k return. He didn't believe me, so took it to H&R block where they worked out it was around $4k.

Smiling like a man with a gobful of tic tacs he took great pleasure in telling me how wrong I was.

Some 4 months later revenue Canada sent him a cheque for an extra $2k (ish) for things that had been missed from the return.

It's the little things in life hey :amen:

To this day I refuse to do his taxes :rofl:

Re: first tax return
 

I took our tax forms to a chartered accountancy firm the first two years that cost over $250 for the both so us. Upon recommendation, I took them to a small local family run business and our refunds were no less than that given when we filed using a CA. Excellent job and $35 well spent indeed!

Re: first tax return
 

I LOVE this!!!

Re: first tax return
 

I dont think I could take my chances with someone who only charges $35. You get what you pay for

Re: first tax return
 

As I said above, the taxes were done in the same way and the results were comparable. Easy to compare the hard copies when you keep them yourself. I just drop off our envelope of documents and pick them up the following week. Job done for $35 each!

Just because a rural family company has far less overheads and charges accordingly, doesn't mean the job gets done any different than big city accountants.

I would also urge newbies to get a professional to do your first year's taxes so you are well aware of all that can be claimed and what receipts you should be keeping. Even if you do them yourself next time, at least you have a hard copy 'Template' to keep you on track the following year.

Re: first tax return
 

Oh I hear what you are saying, but surely even a rural family company has an hourly rate that they are working towards achieving. I am thinking that this means that they prob allocate max 30 mins to your taxes.
But like you say, you are happy, its comparable. I am just not sure it would be the same for someone that needs anything vaguely complex involved - like a house still in the UK for example.

Re: first tax return
 

For our first return we used an accountant (pretty sure he charged more than $35 - but it wasn't much) it was worth it for the peace of mind and getting all the pro rating etc sorted. After that it was easy to file ourselves using one of the software packages mentioned above. I am self employed now so back to the accountant for me but hubby still files his own.

Re: first tax return
 

Hi I take it you could only claim tax on medicals that were conducted in Canada and not the UK?

Regards

Andrew

Re: first tax return
 

Yes, we had our medicals here in Nova Scotia

Re: first tax return
 

No, anywhere in the world as long as the doctor is licensed to practice in the country where the medical procedure takes place. However, you can't claim for medical expenses incurred before you become tax-resident in Canada.

Re: first tax return
 

In this case the PR medicals cost in 2011 just takes the medical expenses up to about $2k so it's not worth doing an adjustment for 2011.

I noticed that one of the options in Turbotax for 2012 is to enter medical expenses incurred in 2011 but not claimed then. Could the PR medical expenses be added to the 2012 tax assessment? (There is already quite a high figure for medical expenses for 2012 - approx $4.3k.)

Re: first tax return
 

Hi


Yes, but it has to be for only a year period ending in 2012.

Re: first tax return
 

So if the PR medical expenses were paid for in october 2011 the 2012 return could only include them if medical expenses generally were only included for Oct 2011 to Sep 2012?

Re: first tax return
 

As PMM says, you can chose any 12 month period that ends in 2012. You can't double dip - you can't claim an expense in October 2011 on both your 2011 and 2012 returns.

Re: first tax return
 

Hi,

So can I claim my medical for Canada on my UK tax return while I am still resident in the UK?

Regards

Andrew

Re: first tax return
 

No, you can't claim expenses incurred before you became tax-resident in Canada. jimf has been here a while.

Re: first tax return
 

Hi

Sorry to ask what is probably an obvious question but what months does the Canadian tax year run between? I was of the understand its jan to dec? Is this right?

Re: first tax return
 

Yes, returns are done for employees once you receive your T4(s) and other documentation.