Every spring, tax filing season arrives in Canada, bringing stacks of forms and tight deadlines that many find daunting. Filing your taxes correctly matters both for staying on good terms with the Canada Revenue Agency (CRA) and for securing all the money-saving credits and benefits you’ve earned.
Taking time to prepare before tackling your tax return can reduce headaches, save cash, and lower your stress levels. Follow these fourteen tips to organize your documents and approach your Canadian tax filing with confidence.
Gather All Your Income Slips
Collect all your T-slips including T4s from employers, T4As for pensions or other income, and T5s for investment income. These documents are usually mailed out or made available online by the end of February each year. The CRA also keeps copies of these slips in your CRA My Account. Missing even one slip could lead to reassessment by the CRA later.
Organize Your Tax Receipts
Sort through receipts for items that qualify for tax deductions or credits in Canada, such as charitable donations, medical expenses, and child care costs. Keep these receipts organized by category to make entering them into your tax return easier and more accurate. The CRA generally requires you to keep receipts for six years in case of an audit. Maintain a good filing system to save time and stress if you ever need to prove your claims.
Review Last Year’s Notice of Assessment
Look at the Notice of Assessment you received after filing last year’s taxes to check for any carry-forward amounts. The CRA may have noted unused RRSP contribution room, capital losses, or tuition credits that can be applied to this year’s return. This document also shows if you had any previous issues that need to be addressed in your current filing. Review this information to maximize all available tax benefits from previous years.
Check for New Tax Credits and Deductions
Research any new tax credits or deductions that have been introduced in Canada since last tax season. The Canadian government often updates tax benefits to address changing economic conditions or implement new policies. Popular Canadian tax credits include the Climate Action Incentive, digital news subscription tax credit, and various home renovation credits. Stay informed about these changes to get significant savings on your tax bill.
Maximize Your RRSP Contributions
Think about adding funds to your Registered Retirement Savings Plan (RRSP) before the cutoff date, typically falling 60 days after December 31st. Making RRSP deposits lowers your taxable income and can dramatically decrease your tax bill. You’re generally allowed to contribute up to 18% of what you earned last year, with yearly maximum limits that the government adjusts annually. Check your most recent Notice of Assessment for your personal contribution limit details.
Don’t Forget Your TFSA
Review your Tax-Free Savings Account (TFSA) contributions for the year to ensure you haven’t exceeded your limit. While TFSA contributions aren’t tax-deductible, they grow tax-free and understanding your contribution room helps avoid penalties. The CRA sets annual TFSA dollar limits, and unused room carries forward to future years. Keep track of your TFSA activity throughout the year to make tax time much simpler.
Claim Work-From-Home Expenses
If you worked from home during the tax year, gather documentation for home office expenses you can claim. The CRA offers a simplified flat rate method for those who worked from home due to COVID-19, as well as a detailed method for claiming actual expenses. Eligible expenses might include a portion of your rent, utilities, internet, and maintenance costs. Make sure you have a completed T2200 form from your employer if you’re using the detailed method.
Report Foreign Income and Assets
Report any money you earned outside Canadian borders and document foreign assets valued above $100,000 CAD on the T1135 Foreign Income Verification Statement. The CRA enforces tight rules for reporting international income, with heavy fines for those who fail to disclose. This includes money from overseas jobs, rent collected on foreign properties, and earnings from investments held abroad. Remember that if you live in Canada, you must pay taxes on all your global income, not just what you earn domestically.
Claim All Eligible Medical Expenses
Collect all receipts for healthcare costs not covered by provincial healthcare or private insurance plans. Your medical expense tax credit can cover numerous items such as medications, dental procedures, vision care, and transportation for medical treatments. This credit applies to qualified expenses for yourself, your partner, and any dependents during any 12-month period that ends within the tax year. Your eligible amount is calculated based on costs that exceed either 3% of your net income or a predetermined threshold, whichever number is smaller.
Don’t Overlook Tuition and Education Credits
For those who pursued higher education, gather tuition payment receipts and T2202 forms from colleges and universities. Depending on your province, you may claim credits for tuition costs, education amounts, and textbook expenses. Any unused education credits can move forward to future tax years or transfer to qualifying family members including parents, grandparents, or spouses. These education-related credits can reduce tax obligations for students and their supporting families.
Check Your Eligibility for the Canada Workers Benefit
Check if you’re eligible for the Canada Workers Benefit (CWB), a refundable credit designed for workers with modest incomes. It offers financial support to hardworking Canadians who earn below certain thresholds throughout the year. Your qualification depends on annual earnings, household composition, and other factors, with enhanced amounts available for people with disabilities. Know the requirements beforehand to ensure you submit complete and accurate information on your return.
Claim All Eligible Child and Family Benefits
Make sure your family details are current to receive every family benefit you qualify for. Programs like the Canada Child Benefit, deductions for childcare expenses, and credits for children’s activities represent just some of the tax advantages for Canadian families. These programs typically calculate benefits based on household income and the age and number of children in your home. Regular updates to your family profile with the CRA helps ensure proper benefit payments throughout the year.
Choose the Right Tax Filing Method
Evaluate whether to complete your tax return independently with software, utilize the CRA’s Auto-fill my Return feature, or engage a tax professional. Let the complexity of your financial situation guide this decision. Straightforward tax situations often work well with free or affordable CRA-certified software options. You might benefit from professional assistance if you’re self-employed, own rental properties, or have complex investment portfolios.
Set Up Direct Deposit with the CRA
Sign up for direct deposit services with the CRA to get your tax refund delivered faster than traditional mail. Beyond speed, direct deposit offers better security and reduces paper waste. You can establish direct deposit through your online CRA My Account, at your financial institution, or by submitting the appropriate form to the CRA. Electronic deposits eliminate worries about mail theft or lost refund checks.
Related: 16 Unique Canadian Tax Deductions You Might Be Missing Out On
While common deductions like RRSP contributions are well known, the CRA allows many other specific deductions that apply to various life and work situations.
16 Unique Canadian Tax Deductions You Might Be Missing Out On
Related: 10 Best Free Tax Software To Consider For Your Tax Filing in 2025
With tax season just around the corner, now is the perfect time to find the right software for your needs. These free options have been certified by the Canada Revenue Agency (CRA) and include all the necessary forms for most Canadian taxpayers.
10 Best Free Tax Software To Consider For Your Tax Filing in 2025
