Friday, 15 February 2013

Income Tax Checklist for the Canadian Investor

Tax season is starting. A few days ago, the Canada Revenue Agency opened up the NETFILE online electronic tax filing service. It's time for Canadian investors to start getting ready for filing their 2012 income tax return. There can be a multitude of slips and receipts to assemble, not to mention older records to dig up and preliminary calculations to do in order to be ready in time for filing on or before the deadline of April 30. We therefore present a calendar of key CRA dates and a document guide / checklist that shows what type of documents to expect and from whom, as well as links to explanations of how to do trickier calculations when more is required than simply copying numbers from slips.

Key Dates
January – mid CRA pdf tax forms for printing available for download at
February - 11 CRA online filing service NETFILE starts accepting 2012 tax returns – certified software list at
March – 1 RRSP contribution – last day for making contribution applicable to 2012 tax year
April – 30 CRA – last day to file 2012 return and pay amounts owing to avoid penalties
June – 15 CRA – last day to file 2012 return for self-employed though amounts owing deadline is still April 30
November – 30 CRA – last day for online filing service NetFile to accept 2012 tax returns

continual CRA issues tax refunds, often within days, if return is filed electronically

CRA dates are rigid; don't be late even by a day or you will miss out or suffer penalties. On the other hand the tax documents below relating to the 2012 tax year flood in progressively from mid-January to the end of March. There can be weeks or more of variation amongst companies that issue the slips and receipts. If in doubt check the website or phone the company involved but don't leave it to the last few days before April 30. It is likely to be hard to get a response in time to file.

Checklist and guide for interest, dividends and capital gains
If your investing involves … look for these documents … from these organisations ....

Borrowed money to invest Investment interest expense on statements from broker for margin, or bank for loan
Canada Savings Bond interest T5 slip (min $50 interest) from broker if held in a broker account or from Bank of Canada if bought directly from BOC;
GIC interest T5 slip (min $50 interest) from broker if held in a broker account or from bank or trust company if bought directly
T-Bill and Stripped Bond interest Annual summary of security transactions Interest = redemption/sale amount – purchase cost; for details see

T5 does NOT show it, even when over $50 e.g.
Mutual fund distributions T3/T5 slips mailed directly by Mutual fund companies, NOT brokers, even when fund is held in a brokerage account
Mutual fund capital gains (sales) Annual summary of security transactions from broker if held in a broker account or from mutual fund company if held directly with the mutual fund company
Bond interest T5 slip (min $50 income) broker
Bond capital gain or loss (sale or maturity) Annual summary of security transactions broker provides statement at purchase year and at maturity or sale; for how to calculate see
Stock dividends T5 slip (min $50 income) broker
Stock capital gain or loss (sale) Annual summary of security transactions broker provides statement at purchase year and at maturity or sale
ETF and REIT distributions T3/T5 slips broker
ETF and REIT (Income Trust) capital gain or loss (sale) Annual summary of security transactions + own records broker for trading transaction summary

Investor must track own adjusted cost base – see

ETF providers publish tax breakdown of distributions on their website. ETF providers in Canada list and links at
Split Corporation income T5 broker

Checklist and guide for account withdrawals, contributions
If your investing involves … look for these documents … from these organisations ....

RRSP contributions RSP Contribution Receipt RRSP account trustee, be it broker, bank, mutual fund company
RRSP contribution room various see four ways to find out -
RRSP / RRIF / LIF / LRIF withdrawals T4 RRSP / RRIF slip RRSP/ RRIF account trustee
RRIF / LIF / LRIF withdrawal limits Evaluation letter or phone call broker
Annuity payouts T4A and T5 slips mailed by insurance companies, both for registered or non-registered annuities
RESP withdrawals T4A Educational Assistance Payment or Accumulated Income Payment slip brokers or financial institution where RESP is held
Non-resident taxpayer NR4 slip broker
TFSA interest, dividends, capital gains, contributions and withdrawals none None – happy days! No tax reporting to do
TFSA contribution room and contribution or withdrawal history phone call or online Canada Revenue Agency – see

In addition to the above checklist, we also refer blog readers to our previous post Tax Resources that can help with preparing taxes

Do it electronically!
Preparing and filing electronically makes much sense. Not only do refunds come much faster but the best of the software packages really help ensure you do not miss or mis-report anything and they may even find deductions or optimizations that save you money. Web software packages are reviewed and rated every year by CanadianFinancialDIY – see last year's results. Wikipedia also has a table comparing basics of all the packages, including the Mac and PC download versions.

Hopefully our lists prove useful to you in reducing the time, effort and frustration of tax preparation. The less time spent doing this necessary task, the more time can be spent profitably investing!

Disclaimer: this post is my opinion only and should not be construed as investment or tax advice. Readers should be aware that the above comparisons are not an investment or tax recommendation. They rest on other sources, whose accuracy is not guaranteed and the article may not interpret such results correctly. Do your homework before making any decisions and consider consulting a professional advisor.

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