Self-employment income refers to the income earned by a sole proprietor or through a partnership business. You are considered a self-employed individual if you have a professional practice, trade business, commission-based business, or any other business, where your income (remuneration) is dependent upon the services and products you sell directly to your clients.

Capital gains in Canada are taxable, so if you sell a property at a higher price than that for which you bought it (after subtracting property expenses and outlays), you are legally responsible to pay the Capital gains tax British Columbia.

Under the Income Tax Act, a dividend paid by a Canadian corporation is taxable and thus considered an “eligible” dividend. Most dividends paid by public corporations are eligible dividends. When the corporations pay out dividends, they are legally required to notify shareholders that the dividend is eligible, before or at the time of payment.

Canadian corporations that are not eligible for the eligible dividend tax credit pay out non-eligible dividends. The non-eligible dividends are small or ordinary business dividends that are taxable at a lower British Columbia tax rate than eligible dividends. The dividends are taxable for the year in which you are paid. Even if you choose to reinvest the dividend, you have to pay the taxes in the same tax year you received the dividend.

If a portion of your income is government benefits, you need to report them in your tax returns as they are taxable. The Canada Emergency Response Benefit (CERB) and Canada Emergency Student Benefit (CESB) are taxable as they are a part of your annual income. Similarly, other types of incomes such as bonuses, or cash prizes from an employer are taxed like regular employment income at your graduated tax rates in the year of receipt.

Interest income is the amount an investor earns for lending funds to an entity. For instance, if you have deposited money in a savings account and you receive an interest income on your savings, the interest income is tax-liable under the other incomes. Interest incomes are usually reported on a T5 Statement of Investment Income slip.

Eligible dividends are taxed on a 38% gross-up rate. Public corporations are legally required to notify, in writing, their shareholders that they are paid an eligible dividend so they can claim the appropriate gross-up.

Passive income is the income you earn without being actively involved in a money-making activity. For instance, if you rent out a property, the rent is your passive income. Passive income can be of several types. Dividends, rent, royalty, leasing, investment saving accounts, and subscriptions are sources of passive income. Most passive incomes are taxable at a higher tax rate in Canada.

A person’s income that doesn’t fall under the salary, business profits, capital gain, and rental income categories, falls under other income. On a tax return, other income is disclosed by taxpayers on the space provided on line 13000 under ‘Other Income’.

Tax exemptions are the removal or reduction of tax liabilities on the taxes of an individual taxpayer whose income would otherwise be taxed for a qualifying reason. Tax exemptions can be permanent or temporary, and they may also reduce the tax or reduce the portion of items on which tax is applied.

The CRA limits the contributions to TFSA by setting a maximum contributions amount limit. For the year 2019-2020, the maximum TFSA contribution limit was $6000. Utilizing the maximum contributions limit helps reduce your tax liability. You can accumulate TFSA contribution room, and you can verify this limit in your CRA My Account.

When you mortgage a house, you agree to pay the lender a mortgage interest payment. These mortgage interest payments are 100% tax-deductible if you rent out the property for one year.

Charitable donations can reduce your taxable income. You can claim charitable tax credits when you file tax returns. To calculate the charitable tax credits, you should check the ‘eligible amount’ on the CRA website to determine the amount of tax credit for charitable donations.

You can receive a 15% tax credit per year for your student loan interest. This tax credit is for both federal and provincial or territorial student loan interest (there are certain provinces that no longer offer tuition credits). In Canada, you receive tax credits not only for student loan interest payments but also for college education expenses if you are eligible for any territorial or provincial tax credits.

Canadian taxpayers can claim up to $8000 per child below the age of 7 and $5000 per child between the age of 7 to 16. Taxpayers with disabled children of any age can claim up to $11,000 in disability tax credit if the child qualifies for it. Daycare center fees, educational institution fees, boarding skills and other expenses listed on the CRA website qualify for child care expenses.

To claim tuition fee tax credits, you can fill out form T2202. If you are studying at a university outside of Canada or the U.S, you’ll need to fill form TL11A or TL11C. Although Federal tax credits for textbooks and other university expenses were removed, you might be eligible for a provincial or territorial tax credit.

Persons with disabilities are eligible for disability tax credits. Disability tax credits are for individuals who are mentally or physically impaired. The tax credits are meant to provide relief to such individuals. To check if you qualify for mental health credits, you need to complete the DTC Application form on the CRA website.

You can claim several tax deductions from your British Columbia income tax if you are eligible.