Frequently Asked Questions
Find answers to common questions about personal tax, corporate tax, non resident tax, CRA letters, and the Proficiency Tax process.
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General Questions
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Personal Tax
Common questions about T1 personal tax returns, self employed income, rental property, capital gains, newcomers, and CRA reviews in Canada.
Who needs to file a personal tax return in Canada?
Most Canadian residents who earn income, received government benefits, or owe tax must file a T1 personal tax return each year. Even if you had little or no income, filing can unlock credits and benefits you may be entitled to.
When is the personal tax filing deadline?
The standard deadline for most individuals is April 30. Self employed individuals and their spouses or common law partners have until June 15 to file, but any tax owing is still due by April 30.
What documents do I need for my T1 return?
Common documents include employment T4 slips, investment T3 and T5 slips, RRSP contribution receipts, rental income and expense records, medical receipts, tuition forms, and any prior CRA notices of assessment.
Can you help with self employed or freelance tax returns?
Yes. We prepare T1 returns for self employed individuals, contractors, consultants, and freelancers. We help organize income and expenses, review GST HST obligations, and identify eligible deductions.
Do I need to report rental income on my tax return?
Yes. Rental income from Canadian property must be reported using Form T776. You can deduct eligible expenses such as mortgage interest, repairs, insurance, and property taxes. Clear records are important if the CRA reviews the claim.
How are capital gains taxed in Canada?
Capital gains arise when you sell property or investments for more than you paid. A portion of the gain is included in your income for the year. The principal residence exemption may apply to your home but reporting is still required.
What happens if I file my taxes late?
Filing late when you owe tax results in a late filing penalty plus interest. If you do not owe tax, there is generally no penalty for filing late, but refunds and benefit payments may be delayed.
Can you help me catch up on several years of unfiled returns?
Yes. We help clients prepare and file multiple years of personal tax returns in an organized sequence. We review what is missing, identify required documents, and help you understand balances or penalties that may apply.
Do you help newcomers filing a Canadian tax return for the first time?
Yes. Newcomers file a partial year return for their arrival year. We review residency date, Canadian and foreign income, applicable credits, and benefit eligibility so the return is prepared with the right context.
Can you help if the CRA reviews or reassesses my personal return?
Yes. We review CRA letters, explain what is being requested, help gather supporting documents, and prepare a clear response. We also help with formal objections when a reassessment is incorrect.
Corporate Tax
Common questions about T2 corporate tax returns, GST HST filing, owner manager compensation, shareholder planning, bookkeeping, and year end tax strategy for Canadian businesses.
Does every Canadian corporation need to file a T2 return?
Most Canadian corporations must file a T2 corporate tax return each year, even if the corporation had no active business or earned no income during the fiscal year. There are very limited exceptions.
When is a T2 corporate tax return due?
A T2 return must be filed within six months after the end of the corporation's fiscal year. Tax owing is generally due two months after year end for eligible Canadian controlled private corporations, or three months for others.
What is the best compensation strategy for a corporation owner?
The right mix of salary and dividends depends on your personal income needs, CPP goals, RRSP room, and the corporation's profit. There is no single correct answer. Each business owner's situation should be reviewed before year end.
When does a business need to register for GST or HST?
Registration is generally required once taxable annual revenues exceed the small supplier threshold. Some businesses should register voluntarily before that point. The rules can vary based on business type, province, and customer base.
Can you help if my bookkeeping is not in order before filing?
Yes. We can review the condition of your records and explain what needs to be organized or corrected before the T2 or GST return can be prepared accurately.
Do you provide corporate tax planning for owner managed businesses?
Yes. We help corporations review year end position, compensation options, shareholder accounts, and planning opportunities before the fiscal year closes. Planning before year end is generally more useful than reacting after.
Non Resident Tax
Common questions about Canadian non resident tax rules for property sales, rental income, withholding, T2062 clearance certificates, Section 216 elections, and NR4 and NR6 forms.
Do non residents pay tax when selling Canadian property?
Yes. Canadian tax rules apply to property sales by non residents. The buyer is generally required to withhold a portion of the sale proceeds unless a T2062 clearance certificate has been obtained from the CRA.
What is a T2062 clearance certificate and when is it needed?
A T2062 is an application to the CRA that calculates the estimated tax on a property sale. It allows the buyer to release withheld funds once approved. Non residents must notify the CRA within 10 days of closing. Starting the process before closing is strongly recommended.
What is a Section 216 election for non resident landlords?
Section 216 allows a non resident to file a Canadian return and calculate tax on net rental income rather than paying withholding on the full gross rent. This can result in significantly less tax if rental expenses are high.
What are NR4 and NR6 forms?
The NR4 slip reports amounts paid or credited to a non resident, including rental income. The NR6 is an application that can reduce withholding on rental income during the year when approved by the CRA before the rental year begins.
Do the Canada US or Canada UK tax treaties remove Canadian filing requirements?
Not usually. Treaties may reduce the applicable withholding rate or affect the final tax result, but Canadian procedures such as T2062, NR6, and Section 216 filings often still apply regardless of treaty position.
Can you work with non residents remotely from outside Canada?
Yes. Proficiency Tax works with clients remotely through a secure client portal, email, and video calls. We regularly support clients in the United States, United Kingdom, UAE, and other countries with Canadian tax obligations.
Do you provide bilingual support for non resident tax matters?
Yes. Proficiency Tax provides support in English and French for CRA correspondence, Revenu Quebec matters, and all non resident tax filings.