Tax Return Checklist for Individuals and Unincorporated Business Owners

The deadline to file our tax returns is quickly approaching, resulting in slight feelings of panic for some individuals and small business owners.  As someone who provides tax services for a living, I have found that (like with many things) the stress is far more manageable when you know exactly what you have to do (rather than a vague idea that documents need to be located and forms need to be filled in).  One of the best ways to mitigate this stress is to prepare a checklist.  If you are looking for a comprehensive tax checklist , David at The Tax Issue has prepared an excellent one and I recommend that you check it out.

The checklist below has some of the more common income, deductions and credits that the majority of taxpayers are likely to have:

Basic Information:

You will need the following information with respect to yourself, your spouse (common law or married) and dependants:

  • Full name
  • Social Insurance Number
  • Current Address (if this has changed since the last time you filed your tax return, you must contact Revenue Canada and, if applicable, Revenue Quebec to advise them of the change before e-filing your return)
  • Date of Birth
  • Province of Residence
  • Marital Status
  • Foreign property ownership over $100,000  

Employment Income - T4s/RL-1s(Quebec):

If you are or were an employee at any point during the year, you will have received a T4 (AND an RL-1 in Quebec) for every place that you worked. 

Investments and Dividends - T5s/RL-3 (Quebec):

These slips are issued by financial institutions and corporations to anyone who has earned investment or dividend income in excess of $50 annually.  If you have any investments in corporations or banks that are not in RRSPs (no slips issued for RRSP investment income) ensure that you have the tax slips.  Also, if you are an owner of an incorporated business and have taken dividends during the year, you should have a T5 slip. 

Related: How to prepare a T5 slip for Incorporated Small Business Owners

Rental Property Income

All amounts earned from rental property must be declared, while expenses relating to the property may be deducted.  Ensure that you have these amounts on hand to enter into form T776.

Related: Details on Rental Property Income and Expenses

Unincorporated/Self Employed Business Income

If you are self employed, have an unincorporated small business or a part time business, you are required to fill out a statement of business activities form T2125.  You will need your sales from your business and related expenses along with all related documentation including invoices, bills, bank and credit card statements .

Related: 

 

RRSP Contributions and Withdrawals

You should receive a slip from your financial institution for both contributions and withdrawals from your RRSP.  Keep in mind that you are only allowed to deduct amounts up to your unused contribution room, which can be found on the prior year notice of assessment from Revenue Canada.

Related: 

 Medical Expenses

Individuals are entitled to claim all medical expenses that exceed a specific threshold.   All expense receipts including date of visit, name of healthcare provider and amount should be accumulated which includes any amounts paid to a private health insurance plan (this does not include employer portions)

Related: Details about the Medical Expenses Tax Credit

Union or Professional Dues

If you contribute to a union or are a member of a professional order, you are allowed to claim this as a deduction as long as it is not already reflected on your T4. 

Charitable Donations

All amounts paid to charities must be supported by receipts from the registered charity. 

Related: 9 Facts About Charitable Donations

Public Transit Passes

Revenue Canada allows for a tax credit for monthly passes (and weekly and daily passes under limited circumstances).  In order to qualify you must have copies of the receipts.

Tuition, Education and Textbook Amounts

A tax credit that is available for post-secondary education, you will receive a T2202, T2202A, TL11A, B or C.  from your educational institution.

First Time Home Buyer’s Credit

If you are a first time home buyer, you are entitled to a credit.  Although no documents need to be sent at the time of filing, the CRA might ask to see copies of the purchase agreement and other documentation (which you should maintain anyway)

Dependants

You are allowed to claim certain expenses for your dependants for which you must have documentation.  These include: 

  • Babysitter
  • Boarding School
  • Daycare
  • Camp
  • Tuition (see above)
  • Fitness and recreation
  • Child arts amount (new) 

In most cases you will receive a specially designated slip that will provide you with the exact amount that you are allowed to claim.

There are a variety of other tax items, the majority of which will be accompanied by some sort of tax slip or other documentation.  When you receive something that looks vaguely official it is always a good idea to keep it and if you are unsure what to do with it, seek the guidance of an accountant.  If you are e-filing your return, then it is not necessary to include any of the tax slips or supporting documentation, however the tax authorities might ask for this at any time generally up to 6 years after the year for which the income tax return is filed.  It is important to note that it is the responsibility of taxpayer to ensure that they meet their tax obligation and report all (worldwide) sources of income .  Although this same obligation does not necessarily extend to deductions and credits, it is clearly in the taxpayers interest to ensure that they claim everything that they are entitled to.

Ronika Khanna is a Montreal accountant who helps small business owners with their accounting and tax issues.  Do not hesitate to contact her for help with preparation or queries relating to your tax return. To receive regular blog updates pertaining to small business, accounting, tax and other topics of interest to small business owners you can sign up here.  You can also follow her on Facebook or Twitter