The questions Canadians actually ask

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RRSP, TFSA & FHSA Deductions & credits Self-employed & gig Students & tuition Seniors, CPP & OAS CRA reviews & audits Brackets & rates Deadlines & penalties

Do I even have to file a return?

You must file if you owe tax, if the CRA asked you to, if you're self-employed, if you sold property or realized capital gains, or if you're repaying benefits. You should file anyway if you want a refund, or if you want the Canada Child Benefit, the GST/HST credit, the Ontario Trillium Benefit, or tuition carry-forward — none of those arrive unless a return is on file, even with zero income.

How long does a refund take?

Filed online with direct deposit, roughly two weeks is typical. On paper, expect eight weeks or more. Returns get slower when a slip doesn't match what the CRA already has, when a claim is selected for review, or when you have a balance owing on another account that the refund is applied against.

Why did I get a refund — or suddenly owe?

A refund means too much was withheld during the year; it is your own money back, not a bonus. Owing usually traces to something withholding can't see: two jobs that each withheld as if it were your only one, CPP or OAS with no tax taken off, self-employment or rental income, or investment income. Fix it going forward with a TD1 update or by asking for extra tax to be withheld.

I can't pay what I owe. Now what?

File on time regardless. The late-filing penalty starts at 5% of the balance plus 1% a month, which dwarfs the interest on paying a few weeks late. Once the return is in, you can set up a payment arrangement, and in cases of real hardship you can apply for relief from penalties and interest.

I made a mistake on a return I already filed

Don't file a second return. Wait for your notice of assessment, then use Change my return in CRA My Account or file a T1-ADJ. You can generally go back 10 years — which also means a credit you missed years ago can often still be recovered.

How long do I keep my receipts?

Six years from the end of the tax year the records relate to. Keep purchase documents for property, investments and rentals for as long as you own the asset plus six years — you'll need the cost base when you eventually sell.

What tax bracket am I in for 2026?

Federally: 14% up to $58,523, then 20.5% to $117,045, 26% to $181,440, 29% to $258,482, and 33% above that. Ontario adds its own five brackets from 5.05% to 13.16% on the same income.

Full tables →

If a raise pushes me into a higher bracket, do I take home less?

No. Only the dollars above the threshold are taxed at the higher rate; everything below keeps its old rate. A raise always leaves you with more after tax. (Income-tested benefits like the CCB can taper, which is a separate effect from your tax rate.)

Did the lowest tax rate really go down?

Yes. The bottom federal rate fell from 15% to 14% effective July 1, 2025, so 2025 used a blended 14.5% and 2026 uses the full 14%. It also lowers the value of credits calculated at the lowest rate, including the basic personal amount.

How much can I earn before paying any tax?

The federal basic personal amount is $16,452 for 2026 (up from $16,129), shrinking to $14,829 for income above $181,440. Ontario's is $12,989. Combined, an Ontario resident with only employment income generally pays no income tax on roughly the first $16,000 — though CPP and EI still come off.

Marginal rate or average rate — which one matters?

Marginal for decisions (should I make an RRSP contribution, take the bonus this year or next), average for budgeting. In Ontario the top combined marginal rate is 53.53%; the average rate on a $90,000 salary is closer to a quarter of income.

Which province taxes me if I moved?

Where you lived on December 31 governs the entire year, regardless of where the income was earned. Payroll withholding switches when you move, which is why a mid-year move often produces an unexpected refund or balance owing.

When is the tax deadline?

For the 2026 tax year: April 30, 2027 to file and to pay. If you or your spouse had self-employment income, you have until June 15, 2027 to file — but the payment date does not move.

Full calendar →

When is the RRSP deadline?

March 1, 2027 for a contribution you want to deduct on your 2026 return — 60 days after year-end, moved to the Monday because February 28, 2027 is a Sunday. TFSA contributions are not tied to this date; they follow the calendar year.

Do I have to pay tax instalments?

Generally when your balance owing exceeded $3,000 in the current year and in either of the two previous years. The CRA sends instalment reminders; paying the amounts they calculate protects you from instalment interest even if your actual year turns out bigger.

How much RRSP room do I have for 2026?

18% of your 2025 earned income, capped at the 2026 dollar limit of $33,810, adjusted for any pension adjustment, plus every dollar of unused room carried forward. Your exact figure is on your latest notice of assessment and in CRA My Account — use that number, not an estimate.

Estimate it →

What's the TFSA limit for 2026?

$7,000 of new room, the same as 2024 and 2025. If you've been eligible since 2009 and never contributed, your total room is $109,000. Withdrawals are added back — but only on January 1 of the following year, which is where most over-contributions come from.

RRSP or TFSA first?

Compare your rate today with your expected rate when you withdraw. High income now, lower in retirement — RRSP. Low or modest income now, or money you may need before retirement — TFSA. If you're on income-tested benefits, TFSA withdrawals don't count as income while RRSP withdrawals do.

What if I over-contribute?

RRSPs have a $2,000 lifetime cushion; beyond that, 1% a month on the excess until it's withdrawn. TFSAs have no cushion at all — 1% a month on the highest excess in each month. Both keep charging until you take the money out, so fix it as soon as you notice.

Is the FHSA worth opening?

If you might buy a first home, usually yes: $8,000 a year up to $40,000 lifetime, deductible like an RRSP and tax-free coming out like a TFSA for a qualifying purchase. Opening one starts the clock on your contribution room, so people often open early even without funding it.

Can I contribute and deduct in different years?

Yes, and it's an underused move. You can contribute now and carry the deduction forward to a year when your income — and therefore your marginal rate — will be higher. The contribution is reported in the year it's made; the deduction is claimed when it's worth most.

Deduction or credit — what's the difference?

A deduction comes off your income before tax is calculated, so it's worth your marginal rate — a $1,000 RRSP deduction at a 43% rate saves about $430. A non-refundable credit is calculated at the lowest rate and can only reduce tax you actually owe. A refundable credit can be paid to you even at zero tax.

Which claims get missed most often?

Medical expenses over the threshold (pooled on one spouse's return), moving expenses when you relocated at least 40 km closer to work or school, union and professional dues, interest on student loans, childcare, digital news subscriptions, and donations carried forward and claimed together in one year.

How do medical expenses work?

You claim eligible expenses above the lesser of 3% of net income or a fixed annual threshold, for any 12-month period ending in the tax year. Only the portion not reimbursed by insurance counts. Claiming everything on the lower-income spouse usually beats splitting them.

Are donations worth claiming?

Yes — the credit rate jumps sharply above the first $200 of donations in a year, so pooling a couple's receipts on one return and carrying small amounts forward (up to five years) is worth more than claiming a little each year.

What about the disability tax credit?

It needs Form T2201 certified by a medical practitioner, and once approved it can be backdated up to 10 years and transferred to a supporting relative. It's also the gateway to the RDSP and the Canada caregiver credit — which is why it's worth pursuing even when it doesn't reduce this year's tax.

Can I still claim rent in Ontario?

Rent isn't deductible against employment income, but rent and property tax paid feed the Ontario Energy and Property Tax Credit within the Ontario Trillium Benefit — a refundable amount claimed on the ON-BEN form with your return. Keep the amount paid and your landlord's name.

Can I claim working from home?

Only under the detailed method now — the temporary flat-rate shortcut from the pandemic years is gone. You need a signed T2200 from your employer, you must be required to work from home, and you claim a reasonable share of eligible costs like rent, utilities and internet. Employees cannot claim mortgage interest or property tax.

Why is my bonus taxed so heavily?

It isn't taxed at a special rate — payroll just withholds as though that pay period repeated all year, which over-withholds on a one-off. It squares up on your return. Directing a bonus into an RRSP before it's paid can avoid the withholding altogether.

I had two jobs and now I owe

Each employer withheld as if it were your only income, so both gave you the basic personal amount and both started you in the lowest bracket. Combined, more of your income sits higher up. Ask one employer to withhold additional tax, or claim the basic amount on only one TD1.

Are moving expenses deductible?

If you moved at least 40 km closer to a new work location or school, yes — movers, travel, temporary lodging, lease cancellation, and some selling costs, deducted against income earned at the new location. Keep every invoice; this claim is reviewed often.

How much tax should I set aside?

A common working rule is 25–30% of net income, and higher above roughly $100,000. Remember you owe both halves of CPP — 11.9% on pensionable earnings up to $74,600 plus 8% on the CPP2 band, to a combined maximum of $9,292.90 in 2026 — on top of income tax. Half of it is deductible.

Do I have to register for HST?

Once your taxable revenue passes $30,000 over four consecutive calendar quarters you're no longer a small supplier and must register. Some people register voluntarily below that to recover input tax credits on start-up costs. In Ontario the rate is 13%.

Is Uber, DoorDash or OnlyFans income taxable?

Yes — all of it, whether or not a slip is issued, and it goes on a T2125 as business income. Platforms report to the CRA under the digital platform rules, so unreported gig income is one of the easier things for them to spot. The upside is that genuine expenses come off first.

What can I write off?

Anything reasonably incurred to earn the income: supplies, software, professional fees, advertising, phone and internet at the business-use share, a business-use portion of vehicle costs backed by a mileage log, 50% of meals and entertainment, and home office space by square footage. Personal use always has to be carved out.

Should I incorporate?

It helps mainly when you're consistently earning more than you need to live on, so profit can be left in the company at the small business rate. If you draw everything out each year, incorporation often adds cost without saving tax. It's a numbers question, not a status question.

Employee or contractor?

Not your choice — it depends on control, ownership of tools, chance of profit and risk of loss, and how integrated you are into the business. If the CRA reclassifies a contractor as an employee, the payer generally owes the unremitted CPP and EI.

Should I file if I made almost nothing?

Yes. Filing is how you claim the GST/HST credit, register your tuition amounts for future years, and build RRSP room. Skipping a year of tuition reporting is the single most common way students lose money they would have used later.

What happens to unused tuition credits?

They carry forward indefinitely and are applied automatically once you have tax to reduce — usually your first real working year. You can alternatively transfer up to $5,000 of the current year's federal amount to a parent, grandparent or spouse. Amounts carried forward can't be transferred later.

Are scholarships and bursaries taxable?

Scholarships tied to a program you're enrolled in full-time are generally exempt. Research grants and some part-time awards are not fully exempt, and they arrive on a T4A that has to be reported. Report the slip and let the exemption be calculated.

Is student loan interest deductible?

Interest on government student loans gives a non-refundable credit, and it can be carried forward five years — so save it for a year you owe tax. Interest on a personal line of credit used for school does not qualify, even if the purpose was identical.

Is CPP and OAS taxable?

Both are fully taxable, and neither has tax withheld unless you ask for it. That's the most common reason a newly retired person suddenly owes at filing. You can request voluntary withholding on both — usually easier than paying instalments.

What is the OAS clawback?

Once net income passes an annual threshold, OAS is recovered at 15 cents per dollar above it, and is fully clawed back at a higher ceiling. Because it's driven by net income, deductions and pension splitting can preserve OAS — which is why the planning is worth doing before December.

How does pension income splitting work?

You can elect to move up to 50% of eligible pension income to a spouse on your returns. It can cut a couple's combined tax, unlock a second pension income amount and age amount, reduce an OAS clawback, and lower the Ontario health premium. It's an election made at filing — both returns must agree.

Should I take CPP at 60, 65 or 70?

Taking it early reduces the monthly amount permanently; deferring past 65 increases it permanently. Health, other income, whether you're still working, and how the extra income interacts with OAS and GIS all matter more than the break-even math on its own.

When do I have to convert my RRSP?

By December 31 of the year you turn 71 — into a RRIF or an annuity. From the following year a minimum withdrawal, set by a percentage that rises with age, is taxable whether you need the money or not. Drawing some RRSP income in your 60s often lowers lifetime tax.

Did the capital gains tax go up?

No. The proposal to raise the inclusion rate from one-half to two-thirds was deferred in January 2025 and then cancelled in March 2025 — it never came into force. Half of a capital gain is included in income and taxed at your marginal rate, which for a top-bracket Ontario filer works out to about 26.76%.

Do I pay tax when I sell my house?

Not if it qualifies for the principal residence exemption for every year you owned it — but you must still report the sale on your return, or the exemption can be denied and penalties applied. Only one property per family per year can be designated, which is what makes cottages complicated.

How is rental income taxed?

Net rent — rent received less mortgage interest, property tax, insurance, utilities, repairs and condo fees — is added to your other income at your full marginal rate. Improvements are capitalised rather than expensed. Claiming depreciation on the building can create a taxable recapture when you sell.

Is crypto taxable in Canada?

Yes, and every disposition counts — including trading one coin for another and paying for something with crypto, not just cashing out to dollars. Most investors report capital gains; frequent, business-like trading can be treated as business income and taxed in full. You need a record of the cost of each disposal.

Which account should hold what?

Interest is taxed at your full rate, eligible Canadian dividends get a credit, and capital gains are half-included — so interest-heavy holdings usually belong in registered accounts and Canadian dividend payers can sit outside. US dividends inside a TFSA lose withholding tax that an RRSP would have protected.

Can I use my losses?

Capital losses offset capital gains — carried back three years or forward indefinitely, but never against employment income. Beware the superficial loss rule: rebuying the same security within 30 days, in any account you or an affiliated person controls, denies the loss.

Who claims the childcare expenses?

Generally the spouse with the lower net income must claim them, with limited exceptions. Daycare, nannies, day camps and before-and-after school programs qualify within per-child limits; overnight camps have their own cap. You need the provider's name and, for individuals, their SIN.

Why did my Canada Child Benefit drop?

The CCB is recalculated every July from the previous year's family net income, so a good income year reduces payments a year later. It also stops if either partner hasn't filed. RRSP contributions reduce net income and can therefore increase the benefit.

Should we file together?

Canada has no joint return, but you must report your marital status and your partner's net income — benefits depend on it. Preparing both returns at once still matters, because medical expenses, donations, the spousal amount and pension splitting are all optimised across the pair.

Is an RESP worth it?

The Canada Education Savings Grant pays 20% on the first $2,500 contributed per child per year — $500 of free money, up to a $7,200 lifetime grant, against a $50,000 lifetime contribution limit per beneficiary. Contributions aren't deductible, but growth and grants are taxed in the student's hands on withdrawal.

Is child or spousal support taxable?

Child support under a post-1997 agreement is neither deductible to the payer nor taxable to the recipient. Periodic spousal support usually is deductible and taxable, if the written agreement or court order sets it out clearly. Lump sums generally are not — the wording of the agreement decides the tax outcome.

The CRA wants receipts. Am I being audited?

Almost certainly not. Most letters come from routine processing review — a claim was selected, often at random, and they want documentation. Send exactly what's asked by the date given, upload through CRA My Account, and keep a copy. Ignoring it gets the claim disallowed automatically.

What triggers a review?

Claims that are large relative to income, first-time claims, employment expenses and home office, moving expenses, medical and childcare, rental losses year after year, and slips that don't match the CRA's copy. Random selection accounts for a good share too — a letter isn't an accusation.

How far back can they reassess?

Normally three years from the date of your original notice of assessment. That window disappears where there's misrepresentation attributable to neglect, carelessness or wilful default — in which case there's no statutory limit.

I disagree with a reassessment

Start with a call — plenty of adjustments come from a missing document rather than a real dispute. If that fails, file a notice of objection within 90 days of the notice date (or one year after the filing due date, whichever is later). Missing that deadline is what turns a fixable issue into a permanent one.

Is that call or text really the CRA?

The CRA does not demand payment by e-transfer, gift card or crypto, does not threaten immediate arrest, and does not text you a refund link. Hang up and sign in to CRA My Account yourself — anything genuine will be waiting there.

I have unreported income from past years

Coming forward first is materially cheaper than being found. The Voluntary Disclosures Program can reduce or eliminate penalties and some interest, but only while the CRA hasn't already started looking at you. Get advice before you file the disclosure.

General answers stop being useful the moment your situation has two moving parts. Twenty minutes with a CPA is usually enough to know whether you have a problem or a preference.