What is Line 15000 on a Tax Return in Canada?

Most Canadians always come across some terms they are not very familiar with when they are filing taxes. Inline 15000 is one of them. If you are reviewing your T1 General Tax Return and are uncertain what it is, you are not the only one. In this blog, you’ll learn about what Inline 15000 is and its significance when preparing your taxes. We will also take time to explain how a tax accountant can help you file your taxes appropriately and effectively.

Understanding Inline 15000

Talking about the Canadian tax returns, Inline 15000 means Line 15000 in the T1 General Tax Return form. Line 15000 is known as the Total Income line, which is basically a line on a tax return in which a taxpayer declares the total amount of income earned in a financial year. This is the total of all your earned revenues over the tax year, such as wages, salaries, self-employment income, interest, dividends, and government benefits. It is an important line on the tax form because the adjusted gross income defines your amount of taxable income or what amount of money you can get back from the CRA.

What Does Line 15000 Include?

Starting from post 15000, you are able to know your tax liabilities. It includes a wide range of income sources, such as:

Employment income: Wages include all forms of remuneration paid to employees and include; salary, wages, tips, and bonuses. If you’re an employee, you would include the income from the T4 slips as your total income.

Business income: For others receiving only their self-employment income, the business profits are recorded here.

Investment income: This includes dividend, interest, or capital gains income.

Rental income: If you own a business or earn income from a business, that is also included Other types of income include any income from interest, dividends, stocks or other investments, any income from pensions or social security, any income from royalties or legal settlements and any income from rental properties.

Government benefits: Some of them are Employment Insurance (EI), Canada Pension Plan (CPP), or Social Security payment, and any of them are taxable and required to be declared.

Due to the fact that Line 15000 contains so many types of income, one has to check whether all of the received income is taxable. Failure to report income from this line could lead to fines or failure to claim a loss or deduction on the returns.

Why is Inline 15000 Important?

Line 15000 in Schedule 1 is important to your tax return because it is used to arrive at your taxable income. The total income reported here is used to calculate your tax liability, which includes:

Tax brackets: The Canadian tax system involves a progressive type of system whereby those with high income pay tax at a higher amount than the low earners. Line 15000 is used to cross reference of what tax rate you qualify for.

Tax deductions and credits: Some credits, as the basic personal amount, or a deduction, like RRSP contributions, depend on your total income. If Line 15000 is not reported correctly, it means that you can be missing a lot of tax deductions.

Taxable income: The figure entered on Line 15000 is deducted from your total income after taking into account your income deductions such as RRSP, and childcare expenses among others.
You can imagine that the right figures on line 15000 are very important to enable you to make the right computation of the right tax to be paid.

How to Fill Out Line 15000

When completing Line 15000, is a simple process of summing up income received from different places. The first step that needs to be taken is to collect all related documents, T4 slips for employment income earned in the previous year, T5 slips for investment income earned, and any other related tax forms. When you have such documents, accurately record the income in the necessary lines.

As much as the process might sound relatively easy for some, mistakes can be made. For example, if you are self-employed, determining business-generated revenue and expenditure becomes rather a complex process. So too is the case with rental income or investment receipts. This would be where having a tax accountant can work in the favor of any business in question. They are also able to lead them through such procedures and reason that income is not reported.

Common Mistakes to Avoid

When filling out Line 15000, there are a few common mistakes that can lead to overpayment or issues with the CRA:

Omitting income: You should know that leaving out some of your income, whether they are from self-employment, rent, or government aid, will attract penalties or fines.
Incorrectly categorizing income: Some forms of income may be grouped into the wrong category, for instance, some business income as salary income causing wrong tax assessment.

Missing deductions: You may be tempted to ignore the fact that you can reduce your taxable income through such tax deductions as contributions to RRSP or other allowable expenses.