Personal Income Tax Guide: The deadline for filing your 2021 return, tax brackets and more

by Ann deBruyn

Two people looking at a computer with mixed emotions as they've just filed their returns

Photo by Ekaterina Bolovtsova from Pexels

The year 2021 has been a year about money, from the latest crypto to inflation to housing prices to taxes. While money trends can go up and down—or up and up for certain matters—taxes can be more predictable, if you’re prepared. This year’s MoneySense income tax guide includes the things you need to know: the deadline for filing your 2021 return, which tax brackets you fall into, COVID-related tax breaks, often-missed tax deductions and more. (And if you have yet to file for the previous year, here’s our 2020 income tax guide —no judgment!)

  • Tax deadline 2021
  • The 2021 tax brackets
  • Changes to income taxes for 2021
  • Tax claims for Canadians
  • How to get started doing your tax return
  • TFSA contribution room
  • Tax tips for Canadians
  • More helpful reading

Tax deadline 2021

Friday, April 30, 2022 is the deadline for filing your 2021 personal income tax return and paying any tax you owe. If you or your partner is self-employed, the deadline to file is June 15, 2022, but the deadline to pay is still April 30, 2022. What happens if you miss your deadline? Filing late means paying interest: 1% per month that you’re late (up to 12 months) and 5% on the balance you owe.

Missed the deadline for filing your 2020 income tax return? Check out our 2020 tax guide.

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The 2021 tax brackets 

Tax brackets should be straightforward: you find your annual income on your T4 slip and voilà, you have a rate. Except it’s not that simple —there’s some math to be done, as the federal, provincial and territorial tax brackets work more like a ladder with various tax rates applying at different income levels. So, depending on your annual income, you could be subject to tax rates from two or three brackets.

To save you time, we break down the 2021 tax brackets for Canada and the provinces and territories based on annual income, showing the minimum and maximum tax dollars for each bracket—before tax credits, deductions, etc.

Knowing your tax brackets will help you estimate how much you could owe come April 30, and to plan and prep accordingly. Could boosting your registered retirement savings plan (RRSP) contributions change your brackets? Maybe. You can also see if your employer is taking off enough (or too much) tax from your paycheque. Plus, checking your tax brackets well before the payment deadline gives you time to save up, if you’re expecting to owe.

Check how your income fits into 2021’s tax brackets.

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Changes to income taxes for 2021

The past two years have been unpredictable to say the least—and that uncertainty applies to filing our tax returns, too. CRB or T2200, anyone? If you don’t know what those are, we have you covered in our 2021 Canadian tax update, including new tax deductions and programs. Get information on the Canada Worker Lockdown Benefit, home office deductions, how to claim a tax credit for digital news, the minimum 15% tax for high-income individuals, credits for home buyers and more.

Find out what’s new for the 2021 tax season.

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Tax claims for Canadians

You likely know about claiming child care expenses, charitable donations and contributions to your registered retirement savings plan (RRSP)—but what other deductions could you get? We list the most commonly missed tax claims. See if you’re eligible for claims related to medical expenses, working from home, moving, tuition and school, investing fees, political contributions or buying your first home. And for each, we include how to make the claim, too.

Read the full article: What can you claim on your income taxes: 7 deductions not to miss.

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How to get started doing your tax return

If you procrastinate with your tax return, know that you’re not alone: in 2020, over 60% of Canadians didn’t file on time. Being late can be costly, though, so we want to help you conquer procrastination—and avoid penalties and interest charges—this tax season. Get motivated with the psychological hacks in our article: How to do your taxes and beat procrastination.

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TFSA contribution room 

How much money can you put into a tax-free savings account (TFSA)? Each year has its dollar limit; for 2021, it’s $6,000. But if you haven’t contributed the full amount annually, you likely have more room. Our TFSA contribution room calculator can help you figure that out. And if you’re debating between a TFSA and an RRSP, you’ll find our explainer on the two tax-sheltered investments very useful.

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Tax tips for Canadians 

To help you navigate tax season, we’ve rounded up our 15 most popular and helpful tips, from how long to keep tax documents to what happens if you lie on your return. You’ll also find advice for dealing with U.S. investments, how much money to set aside for taxes if you’re self-employed, and much more, with links to our full articles on each topic. There really is something for everyone.

Read all 15 tips: 2021 tax season primer: Our roundup of the best tax tips for Canadians.

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More helpful reading

You want more, don’t you? Check out these articles for more information on income tax.

What are you waiting for? Doing your taxes is easier than you think When are tax-deferred and tax-free accounts actually taxable? “Where do we pay income tax if we retire abroad?” Capital gains taxes, explained 6 strategies to help you (legitimately!) pay less capital gains tax 7 ways the tax man is watching you

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