Tax Return from Canada, free of charge, no intermediary, worldwide
Today I will be dealing with one of the most popular topics - how to get some hard made money back into your account. Next, to the tutorial on how to process a tax return from New Zealand, I now add an accurate and detailed tutorial on how to get back some of the taxes you have paid during your work activity in Canada (tax refund/return).
Most people on Work Holiday visa (not only) sooner or later would like to get more details on how to process tax return from Canada. However, in many online forums and FB groups, they encounter many pessimistic opinions of "wise self-proclaimed experts" claiming that independently applying for the tax return (without the help of agencies or intermediaries) is an intricate, lengthy and extremely complicated process. These negative verdicts also state that in order to successfully and correctly claim the tax returns, the applicant must thoroughly study the Canadian tax law and become an expert in the field.
Most applicants get discouraged by these negative opinions and consequently visit a branch of H & R Block directly in Canada, or use the online services of Turbotax, Taxback, Simpletax, etc. These companies and agencies, however, will charge you a good amount of money for their services. Fees can be found in the hidden sections of the agencies' websites, mostly written in the smallest font possible. You will eventually find out about other hidden fees when it is too late of course. You will pay at least 90 CAD per application at a Canadian tax adviser office. On-line agents charge 12.5% by default plus heaps of other fees (handling fee, bank transfer fee, requesting T4 from the employer fee, etc.). From the total amount refunded, for example, 1,300 CAD, you pay an incredible 170 - 180 CAD to the agency! And that's just ridiculous.
If you still want to use such services, I would recommend paying a visit to a personal tax adviser in Canada. In the case of online services, you have absolutely no control over your finances and calculations. Tax return estimates provided by online calculators are entirely pointless and inaccurate. The whole online process is purposely simplified in such a manner that throughout the process you do not have the opportunity to inspect the correctness of the forms filled by the agency and you have no idea how much the actual refund really is.
In the following article, you will learn how to successfully claim the tax return on your own and without any intermediaries (you don't have to be in Canada any longer). The process is not nearly as complicated as it seems at first sight.
Do you want to know how to correctly fill out the application form within 20-30 minutes of your time? And for free? Please read on!
To begin with, I would like to remind you that this article is for your information only. What has worked for me does not have to unconditionally 100% work for you. However, I filled out the request, sent it by post, and in 2 months I received the refund into my account (without any complication from the CRA).
The tax year in Canada corresponds to the calendar year, i.e., 1.1. - 31.12. In general, it is your responsibility to send an overview of all your earnings to the CRA by the end of April of the following year. E.g., the tax return for 2016 must be submitted by 30.4.2017. Electronic uploads via Netfile started 9.2.2017 (only for registered users).
If you are requesting the tax refund for the first time, you need to print out your request and send it by post to Ottawa.
Benefits of this procedure:
Nearly free of charge (you only pay for postage, if you send a request by post from the Czech Republic, expect to pay 150 CZK per letter, 6.70 USD)
Suitable for new and multi-year applicants (Netfile compatibility)
Simplicity and clarity
You calculate the estimated refund immediately
I did not have to choose the status (Resident, Non-Resident, Deemed Resident, etc.). According to the experience of my friends, I have proceeded as a Resident, i. e. as an ordinary Canadian citizen.
What is needed:
Ask for T4 slips from all employers
Canadian bank account (I have left mine open just for this purpose, my BMO account can be subsequently closed via email outside of Canada)
A copy of the SIN number
Download Free Studio Tax (http://www.studiotax.com/en/)
Download, install and run Studio Tax.
The first screen will ask if you need to fill out the tax return for the years 2013-2015. If you fill out only the most recent year (2016), mark NO.
Fill in the address, first name, and last name. If this is your first Canadian tax return, check the first option. Fill in the SIN number and date of birth.
Fill in the street number, street name, city, province, zip code, the province where you lived on 31.12. If you have changed the province during the year, please indicate when. „Is your home address the same as your mailing address?“ I answered yes, even though I was outside Canada at the time of my application (only Canadian provinces and territories are available, no countries). As my address, I stated the address of the last hotel resort where I worked.
If you are single, you leave the boxes in the Marital Status Change box unchecked.
Select Single and continue clicking on Next.
An important section. Enter the date of your first entry into Canada, eventually the date of departure from Canada as the Departure date. We arrived in Canada on April 7, 2016, and worked and stayed in Canada until the end of the tax year, so I only enter the Entry date.
If you worked in Canada for example, January 1. - August 20, 2016, leave Entry date unchecked and check the Departure date with departure date August 20, 2016.
Canadian sourced income asks you for Canadian earnings while you were NON RESIDENTS of Canada. In the period January 1 - April 7, 2016, we did not receive any Canadian earnings, so we only checked the box "income is zero or negative." Most of you check the box "income is zero or negative" anyways.
Foreign sourced income asks you for any income outside of Canada while you were NON RESIDENTS of Canada. If you had worked during the same tax year in the Czech Republic or elsewhere before your arrival in Canada (or after leaving Canada), you must enter the amount converted in CAD into the box. In the period January 1 - April 7, 2016, we did not receive any income (we traveled), so we checked the box "income is zero or negative."
For more information on the 90% rule, read the CRA (http://www.cra-arc.gc.ca).
Most of you click on Next.
If you did not live in Nisga'a Lands, check NO.
Select the correspondence language and state whether you own a property with a total value exceeding 100,000 CAN. Most of you will say NO.
Are you a Canadian citizen? - NO.
If you fill out the tax return for the second time or more, you can use the sync option with CRA online My Account. First-timers click on Next.
The vast majority only picks T4.
Here again, the vast majority just clicks on Next (if you study, focus on Tuition).
In this table, fill out the earnings and deductions for all employers you have worked for during the tax year. Start with your employer's name and go down. The individual "Box" numbers will guide you to find the solicited data on your T4 slip. If there is no data on your T4 listed (such as Board and Lodging) - either the box is empty or T4 does not contain this box at all, leave the box in the Studio Tax blank (do not type 0).
Here again, most click on Next.
And that's all, the whole process is over!
Check the data in T1 (T1 is sent to CRA). T1 has 4 pages. You can navigate between the sheets in the top menu.
The most interesting one is waiting for you on the 4th page of T1 - the total refund (in the worst case, the arrears).
Do not forget to add bank information - only a Canadian bank account.
In the top bar, click Print and select For the government - Condensed return.
You can choose between direct printing or saving to PDF.
Several messages will pop up before you print. If you do not have children, click Next.
If you did not own or sell a property in this tax year, click YES and Next.
We filled out the application as residents. Click NO and Next.
Learn how to prepare your return before mailing it, Next.
After printing the Condensed Return version, I also printed out a full version under "For your records." This version includes T1 (4 pages), Schedule 1 (2 pages), Schedule 8 (3 pages), British Columbia Tax BC428 (I only worked in BC, the form differs depending on the province - Studio Tax will automatically offer you the right versions, 3 pages), British Columbia Credits BC479 (2 pages), T4 - Statement of Remuneration Paid. Before printing, you have to click through several messages again.
In the Federal form section, I also printed the Summary.
It is now necessary to mail all printed documents by post to the CRA branch office.
Documents I've enclosed (rather more than less):
Condensed return - signed on the back!
"For your records return": T1 - signed on the back!, Schedule 8, British Columbia Tax BC428, British Columbia Credits BC479, T4 - Statement of Remuneration Paid
Copies of all T4 slips from employers
A copy of the SIN (what I was issued at the airport in Toronto)
I attached A4 with an explanation that I worked in Canada under the Czech Working Holiday Scheme from April 7 - December 31, 2016, and that outside of the Canadian employers I did not have any other world income.
I sent it by registered post to:
International and Ottawa Tax Services Office
333 Laurier Avenue West
Ottawa ON, K1A 0L9
About 8 weeks later, I received an email confirmation from the CRA (now on you can register your online MyAccount on CRA). After that, 5 days later I received the refund into my Canadian bank account (the refund amount I have received corresponded to the calculation above). Later on, I was able to close my Canadian BMO bank account via e-mail outside Canada.
The CRA did not contact me during the entire process. There were no ambiguities or complaints from their side.
This procedure applies especially to young foreign travelers on Work Holiday visa, childless, not owning any real estate and not receiving any significant world incomes and dividends.
As you can see - this is not a complicated task! I wish all the best and a successful tax refund!
I wrote this article to my best of consciousness and conscience and based purely on my personal experience. Should you use the information stated above on your own responsibility.