Managing Canada tax refund can be easy!
Have you recently moved to Canada on a working holiday?
It’s only natural that you aren’t 100% sure of what your tax obligations are.
After all, moving to a new country presents plenty of challenges!
In this blog post, you will find key information on your Canadian tax requirements.
Do I need to file a Canadian tax return?
You should always file Canadian tax return if you have paid tax in Canada.
Well firstly, by filing your tax return you can ensure that you have a clean record with the Canadian tax authorities – the CRA. This may be important if you intend to apply for a new Canadian visa.
And secondly, thousands of backpackers are due a Canada tax refund each year. And by filing your taxes, you can check how much tax you’re owed back.
When filing a tax return, you will need to declare all of the income you have earned throughout the year.
Also, if you have an underpayment on your tax bill you are obliged to file a tax return so that you can pay the balance to the CRA.
Sunset Travellers have partnered with Taxback.com to help non-residents in Canada file their tax returns and receive their maximum tax refunds!
The average Canadian tax refund with Taxback.com is $998 – so it is worth checking how much you’re owed!
Am I a non-resident for tax purposes?
It’s incredibly important to file your Canadian tax return under the right residency status.
Filing under the wrong residency status will mean that your return is not compliant and this can lead to issues with the Canadian tax authorities.
As a working holidaymaker in Canada, it’s highly likely you are going to be considered a non-resident for tax purposes.
Essentially, you are deemed a non-resident for tax purposes if you:
- normally live in a different country
- are not considered a Canadian resident
- don’t have any significant residential ties related to Canada
- lived in Canada for 183 days or less within the tax year
- are on a one or two-year working holiday visa, and are planning to return to your home country once your visa expires
How much tax will I pay in Canada?
Put simply, that depends on your personal circumstances!
In Canada, there is a tax-free allowance of up to $14,398 for the 2022 tax year.
This means if you earned $14,398 or less you will not have to pay tax on your income.
Any income above this is taxable at 15% on the first $50,195.
As well as this, there are differing tax rates in each province, which means you pay additional tax depending on the province you live in.
What is the 90% rule in Canada?
If you earned income from outside of Canada in a tax year, you may not be able to earn tax-free income in Canada.
This is when the 90% rule may apply to you!
Basically, if you earned more than 10% of your net income outside of Canada, you will not be able to claim the credits.
For example, if you worked in a bar in your home country from January – June and subsequently arrived in Canada and earned income from August – December, but earned over 10% of your net income during the bar work from January to June, you will not be able to claim the credits.
When is the deadline to file my Canadian tax return and what if I miss it?
30 April marks the deadline to file your Canadian tax return for the 2022 tax year.
However, you can always file earlier!
By filing with Taxback.com you can sit back and relax knowing that your return is in the hands of tax experts and that you will be 100% tax compliant.
You’ll also receive your maximum tax refund as soon as possible!
If you miss the deadline and don’t owe money to the CRA there is no late-filing penalty.
However, if you underpaid tax and are due to pay the CRA, you need to file on time.
You will be hit with a late-filing penalty and may risk problems with future Canadian visa applications.
So, it’s important to file before the 30 April deadline – get started with Taxback.com today!
How do I know if I’m due tax back?
There are a range of different factors that distinguish whether you are due a refund, such as if you overpaid tax.
There are three different categories that overpayment of tax can be broken into:
- Overpayment of income tax
- Canadian Pension Plan (CPP) overpayment
- Overpayment of Employer Insurance (EI)
Why not check out the Taxback.com online tax calculator? You can get a free estimation of how much tax back you are due!
Who can help me with my Canada tax refund application?
If you need to file a tax return for the 2022 tax season, Taxback.com can do it for you!
They are the experts when it comes to tax-filing, looking after countless non-resident Canada tax refunds each year.
Why use Taxback.com?
- Their average Canada tax refund is $998
- Simple online process – no complicated forms
- Fast and stress-free service
- Can’t find your documents? They have a document retrievals team that can track them down for you
- You’ll get a personal online account & tax agent
- 24/7 support for any questions you may have