Guide to Canadian Federal Personal Income Taxes

Guide to Canadian Federal Personal Income Taxes

Is the reality of tax season just hitting you? Are you an accountant, anxious about the busy weeks ahead? An average person who just realized they don’t have a clue what they need? Here is the guide you’ve been waiting for. Take a deep breath, relax and enjoy the sweet, lyrical poetry of the Canadian T1 return.

Net Income for Tax Puposes

Income Categories:

Employment income (T4 slip)
Business income (self employment income: T2125)
Property income (rental income or T5 slip: investment income, interest income, dividend income)


Deduction Categories:

Registered pension plan contribution
RRSP contribution
Annual union or professional dues
Child care expenses (typically claimed by lower income spouse)
Business investment loss
Moving expenses (move required by work)
Support payments (spousal, child)
Interest charges for investments
CPP/QPP deductions on self employed income
QPIP premium on self employed income
Other employment expenses (T2200 required)

Taxable Income

Deduction Categories:

Partnership losses carry forward
Non capital loss carry forward
Net capital loss carry forward
Lifetime capital gains deduction

Tax Payable:

Non Refundable Tax Credits (at 15%)

Basic personal amount
Age amount(over 65)
Spouse amount
Canada caregiver amount
CPP/QPP contributions through employment
CPP/QPP contributions on self employment
Employment insurance premiums through employment
Disability tax credit
Employment insurance premium on self employment
Interest on student loans
Tuition amount (T2202 slip from educational institution)
Medical expenses (receipts for medical expenses, printout from pharmacy)
Donations up to 75% of net income (15% on first 200, 29% above)
Canada employment amount
Home accessibility expenses


Federal foreign tax credit
Federal political contribution
Investment tax credit
Federal dividend tax credit
Total income tax instalments paid (based on CRA statements)

Other Important Points:

  • Was a primary residence sold? Need to report for primary residence exemption.
  • Any differences from last year? If so, investigate why.
  • Any change in marital status, new family members?
  • Miscellaneous or other revenue/expenses? More likely to be audited.

By Daniel Zunenshine

Leave a Comment

Your email address will not be published. Required fields are marked *