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Medical residents: The ABCs of filing a tax return

Gone are the days of using paper, a pencil and a calculator to fill out your income tax return, and then mailing it to the Canada Revenue Agency (CRA). Thanks to technology, preparing and filing a tax return has gotten much easier.

While you are a medical resident, your tax return will likely be straightforward, and completing it yourself can give you a better understanding of personal income tax. To help you do so, we’ve put together some information to assist you in getting prepared, completing your return and filing it by the deadline.

Note: The information presented here applies only to federal tax returns. If you’re a resident of Quebec, you must also file a separate tax return with Revenu Québec.

Step 1: Register for an online account with the CRA

What is an online CRA account?

An online CRA account is a secure portal that lets you view your personal income tax and benefit information, and manage your tax affairs online.

How do you register?

There are two options for registering for, and then accessing, this online account:

  1. Register directly on the CRA site using your personal information. You’ll be asked to create a username and password, and CRA will send you a security code to access all portal services.
  2. Go to the same CRA site, but use the login information you already have with your financial service provider, such as your bank or credit union, to register for and access your account.

What can you access using the CRA account?

Your CRA online account will let you:

  • review the status of any tax returns you’ve filed;
  • check your registered retirement savings plan (RRSP) and tax-free savings account (TFSA) contribution room;
  • apply for the Canada Child Benefit;
  • change information about your marital status, address and more.

Step 2: Gather the information you’ll need to complete your return

The next step in preparing to file your tax return is to gather the information you’ll need, including:

  • tax slips (e.g., T4s from your employers);
  • RRSP contribution receipts;
  • the T2202 form, which certifies your eligibility for tuition tax credits, including the Medical Council of Canada exam fees;
  • receipts for any tax credits or deductions, such as eligible moving expenses, medical expenses and child care expenses;
  • allowable interest on your federal or provincial student loans (which can give you credits to reduce any tax you owe);
  • rent receipts if you live in Quebec, Ontario or Manitoba.

Step 3: Prepare and file your return

What software should you use?

These days, many people complete their tax return using software approved by the CRA. The CRA’s website includes a list of CRA-certified commercial tax preparation software packages and web applications to fit all budgets, including options that are free or “pay what you want.”

Most tax software programs provide detailed guidance as you go through the return. As an additional bonus, when you use tax preparation software that is certified by the CRA, many of your tax information slips can be “auto-filled,” which means you don’t have to enter the information directly. Plus, certified software lets you automatically file your tax return electronically with the CRA.

How and when do you file?

Once your tax return is complete, make sure you file it — either electronically or by mail — by the filing deadline. If you don’t have any self-employment income, your filing due date is April 30 for the tax return of the previous calendar year.

How will the CRA acknowledge receipt of your return?

After the CRA has assessed your return, you’ll receive a notice of assessment that indicates whether the return was accepted as filed or the CRA has adjusted it. The notice will also show how much RRSP and TFSA contribution room you have, and other information such as any tuition credit amounts that you can carry forward to a future year.

What if you don’t file a tax return?

If you owe taxes and do not file a tax return, you could face interest charges and penalties.

There are long-term benefits from getting organized for and filing a return, including establishing your eligibility for refundable tax credits (such as the HST or GST credit), provincial benefits like the Ontario Trillium Benefit and the new climate action incentive payment (available to residents of Manitoba, Ontario, New Brunswick and Saskatchewan), and the Canada Child Benefit.

Even if you don’t owe any income tax, reporting your income and filing a tax return will help you accumulate RRSP contribution room for your immediate or future use.

What if you still need help?

MD Financial Management has professional relationships with many accounting firms, some of which will prepare basic personal tax returns for medical students and residents at a low cost or free. For more information, or for personalized financial planning advice, please speak with your MD Advisor*.

* MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.