T1 – Personal Tax Return

Tax season can feel like a swirl of paperwork, acronyms, and deadlines. But behind the complexity is a single, central document that ties everything together: the T1 General Income Tax and Benefit Return, more commonly known as the T1 form.

At Optimize, we complete this return for you. But understanding what it is, and how it reflects your income, deductions, and credits, can help you stay informed, spot opportunities, and make more confident decisions throughout the year. The T1 is not just a form to file. It is a window into your financial life.

The Foundation of Your Personal Tax Filing

The T1 form is the primary document used by individuals in Canada to file their personal income taxes. Whether you earned income through employment, self-employment, investments, pensions, or other sources, all of it flows into this form.

Each year, your T1 summarizes your financial activity and determines whether you owe tax or are eligible for a refund. It also calculates your eligibility for government benefits and credits. Key sections include:

• Total income: from all sources, including employment, investments, CPP, OAS, RRSP or RRIF withdrawals, and more.

• Deductions: such as RRSP contributions, carrying charges, and child care expenses.

• Tax credits: like the basic personal amount, age credit, disability tax credit, and medical expenses.

• Refund or balance owing: based on your total taxes owed versus amounts already withheld or paid.

Why the T1 Matters in Your Broader Financial Plan

Because Optimize completes your T1 return, you do not need to worry about the mechanics of the form itself. But staying familiar with its contents helps you stay connected to your financial plan.

Learn how to read a T1 form to better understand the details and terminology used throughout your return.

This matters when you are deciding whether to:

• Make an RRSP contribution before the March deadline.

• Adjust your withholdings based on a large refund or balance owing.

• Coordinate income from multiple sources in retirement.

• Track how your investment income is reported and taxed.

For example, understanding how your capital gains and dividend income show up on your T1 helps you appreciate how we structure your portfolio to be tax-efficient. Or reviewing your T1 line by line can highlight opportunities to use unused credits, optimize spousal income, or make more strategic contributions in the year ahead.

A Tax Filing Reflects a Year of Planning

Throughout the year, we make many decisions together, around contributions, withdrawals, portfolio structure, and income timing. Your T1 form brings all of that together in a single summary.

Depending on your life stage, it reflects different priorities:

• Starting out: The T1 tracks your eligibility for tuition carry-forwards, first-time home buyer credits, and RRSP deductions.

• Mid-career: It captures the full spectrum of employment, self-employment, and investment income, allowing for strategic planning around deductions and credits.

• Approaching or in retirement: It integrates government benefits, registered withdrawals, pensions, and potential clawbacks like OAS recovery tax, all of which we manage with a tax lens.

Understanding your T1 can also help you anticipate changes and spot red flags early. A shift in taxable income, for instance, could suggest the need to update your withdrawal strategy or adjust how income is split between spouses.

Learn How to Read a T1 Form 

Understanding your T1 is not just about filling in boxes. It shows how your income, deductions, and credits shape your final tax result. Reading it carefully helps you spot patterns, avoid surprises, and make better financial decisions.

At Optimize, we believe that knowing the numbers behind your return leads to smarter choices. This article breaks down key sections of the T1 so you can approach tax season with clarity.

Identification and Basic Information

Think of this section as your tax return’s introduction. It tells the Canada Revenue Agency (CRA) who you are and how to communicate with you.

Name, Social Insurance Number (SIN), address, and marital status
These details help CRA match your return to your personal file. Your marital status isn’t just personal. It can affect your eligibility for benefits such as the Canada Child Benefit (CCB) or GST/HST credit, which are income-tested.

Language of correspondence
You can choose English or French for any future CRA communication. This determines how notices, assessments, and letters are sent to you.

Direct deposit information
Adding or updating your banking details here ensures any refunds go directly into your account, avoiding delays from mailed cheques.

Total Income (Lines 10100 to 15000)

This section gathers all your income streams to create your gross income — the starting point for calculating tax. It's like adding up every ingredient before cooking the main meal. Some of the most common lines include:

• Line 10100 – Employment income
  Income from your main job or multiple jobs, typically reported on T4 slips.
• Line 10400 – Other employment income
  This captures tips, occasional work, or foreign employment income. If you did gig work or side jobs, it’s likely reported here.
• Line 11300 – Old Age Security (OAS)
  A monthly pension for those 65 and older. You’ll receive a slip if you're collecting it.
• Line 11400 – CPP or QPP benefits
  Retirement or disability payments from the Canada or Quebec Pension Plan.
• Line 11700 – RRSP income
  If you withdrew funds from your RRSP during the year, that income appears here.
• Line 12000 – Taxable dividends
  Investment income from Canadian companies, usually shown on a T5 slip. Even if reinvested, these dividends are taxable.
• Line 12700 – Capital gains
  Income from selling investments for more than you paid. If you received a T5008 slip, this may apply to you.
• Line 15000 – Total income
  This is your total income before any deductions. It’s a raw number, not yet adjusted for eligible write-offs.

Net Income and Taxable Income (Lines 20700 to 26000)

Now that your income has been added up, this section subtracts allowable deductions — expenses that reduce your taxable burden.

• Line 20800 – RRSP deduction
  If you contributed to your RRSP during the year, that amount reduces your taxable income. This is a powerful planning tool and often a key discussion point with Optimize advisors.
• Line 21000 – Child care expenses
  If you paid for daycare while working or studying, you can deduct eligible costs — usually claimed by the lower-income partner.
• Line 22100 – Carrying charges and interest expenses
  Fees paid to earn investment income, such as interest on money borrowed to invest or advisor fees for non-registered accounts.
• Line 23600 – Net income
  This figure is used to determine eligibility for government benefits. It’s also used to calculate some tax credits.
• Line 26000 – Taxable income
  After deductions, this is the amount CRA uses to calculate how much income tax you owe.

Federal Tax and Credits (Lines 30000 to 35000)

In this section, the focus shifts from income to reducing the tax you owe using non-refundable tax credits.

• Line 30000 – Basic personal amount
  This is the portion of income you can earn without paying federal tax — available to all residents of Canada.
• Line 31200 – CPP contributions on self-employment or other earnings
  If you’re self-employed or had side income, you’re responsible for both the employee and employer portions of CPP contributions.
• Line 33099 – Medical expenses
  You can claim eligible medical expenses for yourself, your spouse, or dependents if they exceed a certain percentage of your net income.
• Line 33500 – Total non-refundable tax credits
  These credits reduce your tax bill, but they won’t result in a refund on their own. Think of them as a way to lower your balance owing, not increase your return.

Refund or Balance Owing (Lines 42000 to 48400)

This is the “final answer” — whether you owe more tax or get money back.

• Line 42000 – Net federal tax
  This is your federal tax after credits are applied.
• Line 42800 – Net provincial or territorial tax
  Your province or territory also applies its own tax rates and credits.
• Line 43500 – Total payable
  The sum of federal and provincial tax you owe before subtracting payments made throughout the year.
• Line 43700 – Total income tax deducted
  This is the tax already withheld from your income — often from T4 or T5 slips.
• Line 48400 – Refund or balance owing
  The bottom line. If your tax deducted was higher than your total payable, you’ll receive a refund. If it was lower, you may owe more.