Canadian Tax - S19 – Terms to avoid confusion

T1

the individual's personal tax return

T3

generally reports trust allocations/designations

T4

employment income slip that reports employment income

T5

investment income slip that reports certain investment income paid by corporations/financial institutions and others

NETFILE

generally for individuals filing their own returns electronically

EFILE

used by authorized tax preparers and other eligible filers to electronically submit returns.

Income

increases the income calculation

deduction

reduces income in determining net or taxable income

(tax) credit

reduces tax payable, an amount used in the tax calculation

Non-refundable credit

a credit that generally cannot create a refund by itself

refundable credit

a credit that can contribute to a refund after reducing tax payable.

Taxable income

the amount used to calculate tax

tax payable

the resulting tax obligation after applicable calculations/credits.

Refund

money returned to the taxpayer when the final calculation results in money being owed to them.

Tax slip

reports specific information from a payer

tax return

combines information from slips and other sources to calculate the taxpayer's overall tax position.

Taxpayer

the person whose return is being filed

tax preparer

the person preparing the tax return filing