Tax season is here: what newcomers need to know about filing taxes

As a newcomer, filing income taxes in Canada may be a completely new experience for you. The process may even seem overwhelming at first, but it doesn’t have to be so complicated. If you are not hiring a professional tax preparer, but instead want to learn to file taxes on your own, it’s helpful to prepare your taxes using tax software like UFile. Such software can guide you through the process step by step, and make it easy to file your taxes through Canada Revenue Agency’s Netfile service, a simple online alternative to mailing a paper return.

“To keep your first file simple, the UFile platform is designed as an interview process that is both easy to use and easy to understand,” says Gerry Vittoratos, tax expert at UFile. “Through simple and straightforward questions, our software guides you step by step through the tax form.”
Vittoratos adds: “As you fill out your form, the software’s Tax Savings Ideas tool will identify additional deductions and credits that may apply to you. This ensures as thorough a file as possible, without having to know all of the rules in advance.”

Newcomers with additional questions can also use UFile’s virtual tax clinic Tax & U, where resident tax experts are on hand to offer easy answers to your tough questions about tax. “Best of all, as a newcomer filing for the first time in Canada, UFile is free to use, no matter what,” he says.

More to know about income taxes
Still, there’s more to know about filing income taxes in Canada as a new immigrant, starting with determining if you have to file a return this year at all.
If you are a resident who landed on January 1, 2018, or later, you won’t have to file until next year. But, if you landed in 2017, you do, even if you landed late in the year and earned no income here.
“If you were considered a resident of Canada as of December 31, 2017, you must file a tax return for the year,” says Vittoratos. “Even if you earned no income during the year, it actually pays to be diligent at tax filing. In Canada, a tax return is filed not only to declare income, but also to apply for basic government benefits. Certain benefits, such as the GST/HST credit and the Canada Child Benefit (CCB), are ‘income-tested,’ meaning you must file an income tax return in order to receive them.”
Using the information you provide on your return, the CRA will then determine the benefits and payments for which you are eligible.

Dealing with foreign income
When filing an income tax return, don’t forget to also declare any foreign income. Many immigrants don’t realize that any income they earn outside Canada after immigrating, such as rental property income or business income, must still be declared and could be taxable.
Of course, if you immigrated to Canada this year, foreign income earned before you arrived is non-taxable in Canada. “However, this income should still be declared on your Canadian tax return in order to determine your eligibility for tax credits,” explains Vittoratos.
Tax credits are incentives you can claim to reduce the amount of tax you owe, and the CRA uses something called the “90% rule” to determine new residents’ eligibility for tax credits.
For instance, if you had no income, or if 90 per cent or more of your total income while you were living outside of Canada is Canadian-earned, you meet the “90% rule,” and are eligible to claim full credits. Otherwise, you may see your tax credits prorated (divided proportionately) based on the number of days you’ve resided in Canada.
“Be sure to carefully differentiate the income earned before the exact date you arrived in Canada, and the income earned after, as this will affect the amount you owe,” says Vittoratos.
Keep your first file simple — and smart. Register to start and submit your return with UFile now.

New and eliminated tax credits for the 2017 tax year
Every year, the federal government may introduce new tax credits or deductions that you can claim on your income tax return to reduce your tax burden.
For 2017, several key new deductions were introduced, says Gerry Vittoratos, tax expert at UFile. These include:

Canada Caregiver Amount

The Canada caregiver amount has replaced the family caregiver amount, the amount for infirm dependents age 18 or older (line 306), and the caregiver amount (line 315 on your CRA tax software).
If you are the caregiver of infirm dependents, you may be entitled to claim an amount of $2,150 in the calculation of certain credits, like eligible dependent and the spousal amount. Depending on the income of your infirm dependent, you may also be entitled to claim an amount up to a maximum of $6,883.

Medical Expenses

If you’re trying to have a baby, new help has arrived for aspiring parents who can now claim pregnancy assistance expenses. Individuals who need medical intervention to conceive a child are eligible to claim the same expenses as individuals with medical infertility. 

Disability Tax Credit Certification

New for this year, nurses have been added to the list of medical practitioners who can certify eligibility of a person for the Disability Tax Credit. The credit itself hasn’t changed, but these new changes will hopefully reduce wait times for those seeking certification.

The government may also eliminate some deductions. For 2017, these eliminated deductions include:

Federal Education and Textbook Amounts

The credit for post-secondary students’ education and textbooks has been eliminated in 2017. Instead of adding education and textbook expenses to your overall tuition amount, eligibility criteria for the tuition amount has been enhanced to include occupational skills training that isn’t at the post-secondary level. This is good news for people taking courses that haven’t traditionally qualified for credits.

Federal Children’s Fitness and Arts Amounts

These credits allowed you to claim fees paid for signing up your children under 15 to fitness and arts programs. The maximum claimable amounts were reduced in 2016 and have been completely eliminated for 2017.

Federal Public Transit Amount

If you take the bus, subway or streetcar, this is the final year to claim a public transit credit, but for part of the year only. You can claim your monthly bus and subway passes that were bought before June 30, 2017. Any fees paid as of July 1, 2017, are not eligible due to the phasing out of this credit.

-CanadianImmigrant