As the 2025 personal income tax filing season approaches, it is helpful to review several important reminders that may affect how your return is prepared and filed. While individual circumstances vary, understanding the general rules and reporting requirements can help reduce errors, avoid penalties, and ensure you receive the credits and benefits you may be entitled to.

Filing and Payment Considerations

The deadline to file a 2025 personal income tax return is April 30th, 2026. If you or your spouse are self-employed, the deadline extends to June 15th, 2026. Keep in mind that any tax owing is still due by April 30th. Filing on time is important, even if you are unable to pay the full amount owing, as late-filing penalties and interest may still apply. The late-filing penalty is a minimum of 5% of the balance owing on your return, plus a further penalty of 1% of the unpaid tax, multiplied by the number of full months the return is not filed (max to 12 months).

Capital Gains and Losses

Capital gains and losses are another key area of focus when preparing a return. Capital losses realized during the year may be used to offset capital gains, and any unused losses can be carried back up to three years or carried forward indefinitely. In some cases, investments that do not have value can potentially be claimed worthless and qualify for capital loss. Consult a professional tax advisor to determine if a security is deemed “worthless”.

Charitable donations of a publicly traded security in-kind with a capital gain can also provide a tax benefit. You will receive a donation tax receipt for the fair market value of the security and the gains may not be taxable to you.

Pension Income Splitting

For individual receiving eligible pension income, splitting the pension income may help reduce a family’s overall tax burden. Up to 50% of eligible pension income can be allocated to a spouse, potentially lowering marginal tax rates or reducing exposure to income-tested benefits such as Old Age Security claw back.

The federal pension income tax credit of up to $2,000 may also be available, with the possibility of transferring unused credits between spouses. This situation occurs when one spouse doesn’t need to claim all of the credit in order to reduce their federal taxes to zero.

Tax Credits

There are also many other tax credits and deductions that may help reduce taxes payable. Below are the most common:

Medical expense tax credit: Eligible medical expenses that can be claimed have to be more than 3% of new income or $2,832 (whichever is less). Amounts above this threshold are eligible for non-refundable credits.

Disability Tax Credit: This credit is for individuals that have prolonged and severe impairments. Eligibility requires certification from a medical practitioner and approval of the appropriate CRA form. This credit may also open the door to other tax-advantaged programs and can be transferred within a family.

Tuition Credit: This is available to students attending qualifying educational institutions. If a student does not have sufficient income to use all their tuition credits due to little or no income, they can transfer up to $5,000 to their parents, grandparents or spouse in the year the expenses are incurred. If the credits are not used, it can be carried forward into future years.

Childcare expenses incurred to allow an individual to earn income, attend school, or conduct eligible research may be deductible. The maximum deduction is $8,000 for each child under the age of 7, $5,000 for each child between ages 7 and 16, and $11,000 for children who are eligible for Disability Tax Credit. These expenses are claimed by the lower-income spouse.

Work from home expenses may also be deductible provided that CRA criteria are met. Eligibility and calculation methods can vary so it is important to review the applicable rules.

It is also important to remember that some tax slips are often issued later in the tax season. All income must be reported, even if a tax slip was not received, and returns should be amended promptly if additional slips arrive after filing. Supporting documents should be kept in a safe place for at least 6 years, and the CRA’s My Account service can be a helpful resource for accessing tax information and notices.

This article highlights some of the key points in preparing for your 2025 taxes; however, be sure to speak with a qualified tax advisor for the specific rules and eligibility that applies to you.