Form TD 1

Form TD 1, personal tax credits return, is a form that is necessary for calculating how much tax should be withheld from payments. It must be completed when you start a new job so that your employer can pay you accurately.

In Canada, one of the most common tax that you pay is income tax. If you are an employee, you employer is responsible for deducting this tax from you income.

When you start a new job, you will fill out form TD 1 with your best estimate of your tax situation.Your employer uses this form to calculate the amount of income tax to deduct from your pay.

You will enter amount or amounts such as the basic personal amount for tax credits you will claim when you file your income tax and benefit return for the year.

The Tax credits will help you reduce the tax that you might owe on your income.If you are claiming other amounts such as tuition fee, your employer can deduct less taxes from your paychecks. ( Detailed discussion of what payments can be used to avail tax credits, will be done in upcoming articles.)

Thanks.