# name: preparing-canadian-personal-tax-returns description: Helps organize and prepare a Canadian personal income tax return (T1) — slips checklist, deductions vs credits, federal brackets, deadlines, NETFILE, and instalments. Use when the user asks for help preparing, organizing, or checking their Canadian tax return, T1, T4/T5/T3 slips, RRSP deduction, CRA filing deadlines, refund estimation, or which credits apply. Do not use for US returns (preparing-us-personal-tax-returns), corporate T2 returns (filing-canadian-business-taxes), or tax planning strategy (optimizing-canadian-personal-taxes).

# Preparing Canadian Personal Tax Returns

# When to use / when NOT to use

• Use for: organizing slips, mapping income and deductions to the T1, distinguishing deductions from credits, deadline and payment questions, NETFILE readiness, instalment rules for an individual return.
• Do NOT use for: US 1040 returns, corporate T2, GST/HST business filings, or planning strategy for future years. Quebec residents also file a provincial TP-1 — flag it, then stay on the federal T1.

# Important limits

• Educational preparation help, not professional tax advice — complex situations (departure tax, foreign property T1135, audits) go to a CPA.
• All figures below are stated for tax year 2026 and MUST be verified against canada.ca before use.
• Never assist with evasion — unreported income or fabricated deductions are out of scope; if asked, decline and explain the legal alternative.

# Workflow

1. Collect slips against the checklist: T4 (employment), T4A (pensions/self-employment/scholarships), T5 (investment income), T3 (trust/fund distributions), T5008 (securities sales), T2202 (tuition), RRSP contribution receipts (including first-60-days), T4E (EI), T4A(P)/T4A(OAS), plus rent/property-tax records where provincial credits apply.
2. Confirm residency and province on December 31 — provincial tax and credits follow that province.
3. Map income to T1 lines (see the slip map in references/reference.md); capital gains from T5008 need cost-basis reconciliation.
4. Apply deductions (reduce taxable income): RRSP (within the deduction limit on the prior notice of assessment), union dues, child care, moving (eligible cases). Keep the distinction from credits precise.
5. Apply credits (reduce tax): basic personal amount, medical above the income floor, donations (two-tier federal rate), tuition, disability, Canada employment amount.
6. Compute balance or refund; check the instalment rule — CRA requires instalments when net tax owing exceeds $3,000 (Quebec: $1,800) in the current year and either of the two prior years.
7. Validate: every slip from step 1 appears on the return (CRA auto-matches slips — omissions trigger reassessment); RRSP claimed ≤ deduction limit; totals cross-check against slips; NETFILE confirmation number recorded after transmission.

# Current figures (tax year 2026 — verify before use)

# Edge cases & failure modes

• Missing slip → pull it from CRA My Account (Auto-fill my return); never estimate silently.
• Error found after filing → ReFILE or T1 adjustment (T1-ADJ); do not file a second return.
• First-time filer → NETFILE may require paper filing or CRA account setup first.
• Can't pay → file by the deadline anyway: the late-filing penalty is 5% + 1%/month (up to 12), separate from interest on the balance.
• Foreign property > $100,000 cost → T1135 required; steep penalties — flag and refer out if complex.

# References

Full slip map, credit tables, deadline calendar, penalty structure, and worked examples: see references/reference.md.