How to report dividends on a T5 Information Return

Completing a T5 information return for dividends can be a confusing process, especially if you’re new to filing taxes. In this blog post, we’ll cover when a T5 is needed each year, understanding the difference between salary and dividends, the tax filing deadline, and more.

What is a T5 Dividend Return?

A T5 Information Return is a form that is used to report dividends earned from investments such as stocks, bonds, and mutual funds. This form is used to report the income earned from these investments to the Canada Revenue Agency (CRA). The T5 must be filed by the end of the month following the end of the tax year. The most typical use for a T5 is to report dividends declared by a business to its shareholders.

What is the Difference Between Salary and Dividends?

It is important to understand the difference between salary and dividends when filing taxes. Salary is the money earned from an employer, and is subject to income tax. Dividends, on the other hand, are income from investments, and are subject to capital gains tax. Salary is reported on a T4 form, whereas dividends are reported on a T5 form. 

Tax Filing Deadline

The deadline for filing a T5 Information Return is the end February following the end of the tax year. For example, if the tax year ends on December 31st, the deadline for filing the T5 is February 28th. It is important to make sure that all forms are filed on time, or you may incur penalties and interest.

Dividend Earnings Report

When filing a T5 Information Return, you will need to report your dividend earnings. This can be done with a Dividend Earnings Report. This report will include the total amount of dividends earned throughout the year, the amount of dividend tax paid, and any other relevant information.

Conclusion

Completing a T5 Information Return for dividends can be a confusing process, but understanding when a T5 is needed each year, understanding the difference between salary and dividends, the tax filing deadline, and more can help make the process easier. Make sure to file your T5 on time to avoid any penalties or interest.

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