2011 Tax Return instructions

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2011 Tax Return instructions Powered By Docstoc
					                     Welcome to Canada
                    International Students
International Tax Services Office
Session objective
  To give you important information on how to
   file an income tax return as a newcomer to
   Canada.

  Brief overview of residency and how it affects
   tax.

  To tell you about the tools and resources
   offered by the Canada Revenue Agency
   (CRA) that are available to help you file your
   tax returns.

                                                    2
Canada’s tax system

 Based on residency not on citizenship.

 Self-assessment system means you are
  responsible for reporting your income
  and paying the correct amount of income
  tax.




                                           3
Resident of Canada
 Am I a resident of Canada for tax and
 credit purposes?

 At the Canada Revenue Agency, we
  consider you to be a resident of Canada
  for tax and credit purposes when you
  establish residential ties in Canada.

 You usually establish these ties on the
  date you arrive in Canada.
                                            4
Residential Ties in Canada
 Dwelling place available

 Spouse and/or dependents

 Personal property

 Memberships

 Economic ties
                             5
Residency
Why is residency important?

 A resident of Canada pays tax in Canada
  on his or her world income.
 You must be a resident of Canada to be
  eligible for social benefits (GSTC and
  CCTB).
 A resident of Canada can claim all
  deductions and credits that apply to them
  to reduce their tax.
                                          6
Residency Status

 Resident

 Non-Resident

 Deemed Resident

 Deemed Non-Resident

                        7
Resident of Canada


  An individual who enters Canada and
   who has established significant
   residential ties with Canada.




                                         8
Deemed Resident

 A deemed resident is a resident of
another country who has sojourned in
Canada for 183 days or more in a
calendar year and has not established
significant residential ties with Canada.



                                            9
Non-Resident

 A non-resident is a resident of another
  country who has not established significant
  residential ties with Canada.




                                          10
Deemed Non-Resident

 A deemed non-resident is an individual
  who under a tax treaty is considered a
  resident of another country.




                                           11
More information
Where can I get more information?
Publication T4055, Newcomers to Canada
Publication T4133, Are you a Newcomer
 to Canada?
Form NR74, Determination of Residency
 Status (Entering Canada)
Interpretation Bulletin IT221R3,
 Determination of an Individual’s Residence
 Status
CRA Web site:
   www.cra.gc.ca/internationalstudents
                                         12
Do you have to file?


 You owe taxes

 We sent you a request to file




                                  13
Should you file?
 You want to claim a refund of tax that has
  been withheld

 Tuition and education amounts

 Goods & Services Tax Credit / Harmonized
  Sales Tax Credit (if eligible)

 Canada Child Tax Benefit (if eligible)

                                           14
Tax Package

 The Canadian tax return comes in two
  booklets – one is a Guide and the other a
  Forms booklet. The Forms booklet is for a
  province or territory.

 Resident
  File under the province where you normally
  resided on December 31st 2011

                                         15
How to complete a return ?
Income tax return –
“Identification” area
 No social insurance number (SIN)?
  Contact a Service Canada (SC) office for
 information about applying for a SIN or visit their
 website for more information.
 www.servicecanada.gc.ca

 Can I use my expired 900 SIN to file my
 income tax return?
  Yes—you can use your expired 900 SIN to file
 your income tax return.                          17
No Social Insurance Number
(SIN)?

Not allowed to get a SIN?

   File Form T1261,
    Application for a Canada Revenue
    Agency Individual Tax Number (ITN)


                                         18
Information about your
residence
Date of entry

 Newcomers—enter the date you arrived
  in Canada.

 We need this information to calculate any
  benefits that you may be entitled to.


                                          19
How long in Canada?
  Did you become a resident of Canada before
  last year?
 If you became a resident before last year, you
  should file an income tax return for each year
  you lived in Canada.
 You should put your date of entry only on the
  tax return for your first year in Canada.
 You can get tax returns for previous years on
  our website at www.cra.gc.ca, or by calling
 1-800-959-2221.
                                             20
 Be sure this is an
address where you
  can be reached
 between May and
      August




                21
  If you are a resident who
 entered Canada for the first
time in 2011, put in your date
           of entry


                           22
GST/HST Credit and Foreign
Property Reporting




                             23
Goods and Services
Tax/Harmonized Sales Tax Credit

 As a newcomer, you should:

  complete Form RC151, GST/HST Credit
   Application for Individuals Who Become
   Residents of Canada; and

  send the completed Form RC151 to the
   tax centre that serves your area.
                                          24
25
World Income

 This is taxable from your date of entry.

 Report world income in Canadian dollars.

 Exchange rates are available from the
  Bank of Canada at:
  www.bankofcanada.ca



                                             26
Information Slips

  T4      Employment Income
  T4A     Other Income

  T5      Statement of Investment
           Income

  T2202A Tuition, Education and
          Textbook Amounts
          Certificate
                                     27
Teacher – Research Assistants


 Report employment income at line 101

 See your T4 slip




                                         28
T4 Information Slip
             2011
              L. 101




        QC




                       29
     2011



        10,391 58      310    00


ON          116   00


                             30
You can always refer to the reverse side
     of a slip for more information




                                      31
           T4A Other Income




                        Footnote Code
Scholarships and      04= Research Grant
    research grants   05= Scholarship      32
Research Grants (line 104)
  Report your net research grant

   Subtract your expenses from your
    grant;
   Your expenses cannot be more than
    your grant;
   Attach to your return a list of your
    expenses.

 For more information see IT-75
  “Scholarships, Fellowships, Bursaries,
  Prizes, and Research Grants”
                                           33
 Other Income (line 130)
 Scholarship

 Bursaries

 Fellowship

 Artist Project Grant

 Prize for Achievement in field of study


                                            34
    Scholarship Income 2006
    and future years
    The full amount of scholarships,
    fellowships, or bursaries that are received
    by you as a student if you are entitled to
    the education amount (see line 323) are no
    longer reported as income on your tax
    return.

 If you are not eligible for the education
 amount, report on line 130 only the
 amount that is more than $500.
                                              35
Deductions

 You may be entitled to deductions which
  may reduce your taxable income, for
  example:

  Moving expenses
  Child Care expenses
  Other expenses

                                            36
37
 International students and
 moving expenses
An international student can deduct
moving expenses if he or she is:
  Attending post-secondary courses in
  Canada as a full-time student and;
  Receiving taxable-award income (e.g.,
  scholarship) after the move. You cannot
  deduct moving expenses against non-
  taxable scholarship, fellowship, and
  bursary income.
  See Form T1-M for more information. 38
Foreign income

 Are there exemptions under a tax treaty?

 Call the International Tax Services Office at:
  1-800-267-5177

 Do I have to pay tax in both countries?
  See “Federal foreign tax credit,” line 405, on
  Schedule 1.


                                                   39
Tax Credits
Tax Credits Help Reduce the
Amount of Tax You Pay –

   Non-refundable tax credits can only be
    used to reduce the amount of tax you
    pay to zero and any excess cannot be
    refunded

   Refundable tax credits can be used to
    reduce the amount of tax you pay to
    zero and any excess may be refunded

                                            41
              Credits

Non-Refundable      Refundable
 Tax Credits        Tax Credits

 Personal amounts  Provincial
 Tuition fees       property tax credit
 Education amount  Sales tax credit
 Medical expenses
                                     42
Schedule 1




             43
  Calculating federal
  non-refundable tax credits

You may have to prorate your
 non-refundable tax credits based on the
 number of days you are resident in Canada.

The rules are the same for calculating
 provincial or territorial non-refundable tax
 credits.

                                                44
Example
Jane arrived in Canada from Australia on
May 6, 2011.
She entered “05-06” in the Identification area of
her return. She calculated that from May 6 to
December 31 there were 240 days.
Jane claims the basic personal amount
calculated as follows:
240 days in Canada x $10,527.00 = $6,921.86
365 days in 2011
Jane will enter $6,921.86 on line 300 of her
Schedule 1.
                                            45
Claim full non-refundable tax
credits?
 Yes—if you have no income for the part
  of the year that you were not a resident
  of Canada.

 Yes—if you meet the 90% rule for the
  part of the year you were not resident in
  Canada.

 You must attach a note to your return
  showing your world income for the part of
  the year you were not resident in Canada.
                                          46
Tuition, education, and textbook
amount

 Use Schedule 11

 Take the information from T2202A




                                     47
T2202A




                        Months full-time
   Months part-time

         Tuition Fees
                                           48
Schedule 11




              49
          Textbook Amounts

 You are eligible to claim an amount for
 textbooks only if you are entitled to claim
 the education amount.

The amount is:
 $65 for each month you qualify for the
  full-time education amount; and
 $20 for each month you qualify for the
  part-time education amount.
                                           50
Public Transit Passes Amount
You can claim the cost of monthly public transit
 passes if you had Canadian source income
 during the year.

Public transit includes transit by local bus,
 streetcar, subway, commuter train or bus, and
 local ferry.

Receipts – Keep all your receipts and passes in
 case we ask to see them.

                                                   51
Canada Employment Amount

All employees are eligible to claim an
 employment tax credit.

Claim the lesser of:

 $1,065; and
 the amount reported at lines 101 and 104
  of your return.

                                         52
53
Filing Date

 On or before April 30th

 On or before June 15th for self-employed
  individual

 In all cases, any outstanding balance is
  due on or before April 30th


                                             54
Mailing Your Return
 Newcomers should send their tax
 return to:
 International Tax Services Office
 Post Office Box 9769, Station T
 Ottawa ON K1G 3Y4




                                     55
T1 Adjustments
 Reassessment requests should be sent using
  form T1-ADJ or with a detailed letter

 Do not send in an amended return

 For the years you are required to send your tax
  return to the International Tax Services Office,
  you must also send your reassessment requests
  for those same years to the International Tax
  Services Office
                                                56
Canada Child Tax Benefit
As a newcomer, you:

Need to complete Form RC66, Canada
 Child Tax Benefit Application; and
May have to complete Schedule
 RC66SCH, Status in Canada/Statement of
 Income
Send your completed forms to the tax
 centre that serves your area.
                                     57
More information

 For more information, you can call toll
 free1-800-267-5177, or go to our Web
 site at

 www.cra.gc.ca/internationalstudents




                                           58
Thank you

				
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