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T1 vs. T4 forms: Understand the difference

When you’re running a small business, there’s a lot of paperwork to keep track of. Come tax time, there'll be many forms to navigate and fill out. So, when taxes are due, you might find yourself wondering about the difference between the T1 and the T4.

If you’re feeling overwhelmed or slightly confused by all the T-forms you need to complete, here's what you should know. 

T1 tax form: What is it? 

Your T1 General income tax form, also known as the Income Tax and Benefit Return, is your personal tax return. It’s a summary of all the income taxes you pay to the Canada Revenue Agency (CRA).

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Who fills out the T1 tax form?

All Canadians have to fill out a T1 each year. Even if you don’t earn any income, completing the T1 form helps ensure your eligibility for certain benefits and credits. 

If you run a sole proprietorship or partnership, you have to complete a T1. If you run a corporation, you would file a T2 return every tax year as well. 

You can complete the T1 yourself, have your accountant take care of it, or automate the process using tax solutions like QuickBooks. 

What is on the T1 tax form?

The T1 tax form includes the following sections: 

  • Personal information: This section asks for information like your name, address, province, Social Insurance Number, province of residence, marital status, and date of birth.
  • Total income: This is where you include your sources of income and the amount you made. Some examples of income include employment income (listed on your T4 slips), self-employment income, interest, investments, and benefits. 
  • Net income and deductions: Here you report any deductions you're eligible for, such as your pension, Registered Retirement Savings Plan, and self-employment deductions. 
  • Taxable income: This is a record of your income after deductions. 
  • Refund or balance owing: This section outlines how much you owe for taxes or how much of a refund you will receive. 

Where to view the T1 tax form?

You can find your T1 form in your CRA My Account alongside any T1s from the past 11 years. To access your forms, go to the Tax Return navigation tab.

T4 tax form: What is it?

The T4 tax form, also known as the Statement of Remuneration Paid, identifies earned income for salaried employees. Employees should receive a T4 from their employer every new year to show how much they made during the previous calendar year. 

Income to report on a T4 includes:

  • Salary or wages
  • Bonuses
  • Vacation pay
  • Commissions
  • Taxable benefits or allowances
  • Retirement allowances
  • Payments from a wage-loss replacement plan
  • Gross and insurable earnings of self-employed fishers
  • Income in certain situations (such as for barbers, hairdressers, taxi drivers, etc.)

Who fills out the T4 tax form?

As an employer, you’re responsible for completing a T4 for each employee. If you’re an employee, your employer should fill out the form for you and send it to you by the end of February. 

As an employer, you must complete a T4 slip if you meet any of the following conditions:

  • Remuneration is more than $500.
  • You provide employees with taxable group term life insurance benefits (even if less than $500 per year).
  • You're reporting pension adjustment amounts for employees who received benefits under a registered pension plan or deferred profit-sharing plan.
  • You deducted for the Canada Pension Plan or Quebec Pension Plan, Employment Insurance premiums, Provincial Parental Insurance Plan premiums, or income tax from the remuneration. 

For more information on the types of income you should and shouldn’t report on a T4 slip, visit the Government of Canada website.

What is on the T4 tax form?

Information on the T4 tax form includes:

Totals for all employment income

Canada Pension Plan contributions

Employment Insurance premiums

Income tax deducted

Where to view the T4 tax form?

As an employee, your employer should provide your T4 tax form by the end of February. If your tax form gets lost or is late, you can request an additional copy from your employer.

If you’re looking for a T4 from a previous year, you can log in to your CRA My Account to view your tax slips online.

The main differences between T1 vs. T4

While the T1 and T4 sound similar, there are many important differences between the two.

First, they differ in terms of purpose. The T1 General is your personal tax form. This is the document you submit to the CRA in order to officially file your individual tax return.

Your T4 is a summary of your employment income and tax deductions for the calendar year, which your employer provides you with. And, if you're a business owner, it's also the document you will need to provide each of your employees by the end of February each year so they can file their taxes on time. 

The main difference between the two is who completes the form. While everyone should fill out the T1, only employers are responsible for filling out the T4 and providing it to their employees. 

Simplify your taxes

When it comes to filing business taxes, there’s a lot to learn — and it can initially seem complicated. Luckily, tools like QuickBooks Online can help you do everything from tracking your income and sales tax to organizing your bills and preparing your taxes. Try QuickBooks Online now to find out how it can help you simplify tax time.

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