During each tax season, your tax preparer will ask you to gather all of your T-Slips in order to report the information on your tax return. But what are all of these slips and how are they different?
All T-slips are filed by corporations, partnerships, sole proprietorships, and trusts to report funds that have been distributed to taxpayers, whether they be individuals, corporations, or trusts. The slips are then distributed to the taxpayers to report as income on their tax returns.
We have provided an overview of some of the most common slips:
T4 Statement of Remuneration Paid
The T4 slip is the most common slip for individuals. It is used to report salary and wages, tips, bonuses, commissions, and other types of remuneration for work done as an employee. It also includes taxable benefits, like the use of a company car; deductions withheld by the employer, such as your income tax, CPP contributions and EI premiums; and pension adjustments, if your company has an internal retirement savings plan. Individuals will receive a T4 from all employers that have paid out at least $500 to the taxpayer. Additionally, there are sub-types of T4 slips: the T4RIF and T4RSP, used to report income received from registered retirement accounts, as well as the T4E slip for employment insurance income.
T4A Statement of Pension, Retirement, Annuity, and Other Income
Like the T4 slip, the T4A is only issued to individuals. It reports a wide range of income types, including pension and annuity payments, self-employed commissions, RESP educational assistance payments, payments to contractors, and even grants, scholarships, and prizes. There are also sub-types of T4A slips: the T4A(P) for CPP income and the T4A(OAS) for OAS income,
T5 Statement of Investment Income
The T5 slip is familiar to taxpayers who are shareholders in pubic or private companies, as well as anyone who holds an interest-bearing bank account or dividend-paying investments. The types of income reported on these slips are eligible and non-eligible dividends, interest, capital gains, and royalties.
T3 Statement of Trust Income Allocations and Designations
T3 slips are received by taxpayers who are beneficiaries of a trust, hold mutual funds in non-registered investment accounts, or have received a distribution from an estate. They report similar types of income as the T5, but with the income originating from a trust or mutual fund instead of a corporation.
T5008 Statement of Securities Transactions
Individuals and companies who have investments in non-registered accounts, and who actively buy and sell these investments, will be issued a T5008 slip to report amounts paid to taxpayers for securities that were sold during the year. Normally the slip will include an amount of proceeds (the amount received for selling an investment security) as well as the adjusted cost base (ACB), which represents the price originally paid for the security that was sold. Careful attention is required to see that the ACB matches with your records, because it is subtracted from the proceeds to calculate the capital gain as a result of the sale. If it is incorrect or missing, you may end up paying more capital gains tax than necessary.
If you are unsure that you have gathered all of your T-slips for this tax year, you can double check what slips have been issued to you using your CRA MyAccount for Individuals. This portal contains great information for you, including copies of your Notices of Assessment from prior years, and a listing of all T-slips issued to your SIN for each year. Once you have logged into the CRA MyAccount portal, select "Tax information slips (T4 and more) from the menu on the right hand side of the screen, select the tax year, select "All Slips" and you will get a listing of all the slips that have been filed for you to date. If you have not received a copy of a particular slip in the mail, you can print a copy from here to submit to your tax preparer.
If you have questions about any T-slips you've received, feel free to give us a call.
Written by: Rob Fahie