Tax filing season officially began just over three weeks ago, and according to the latest individual income

tax return statistics

for the 2026 tax-filing season, as of March 15 the

Canada Revenue Agency

has received

5.5 million returns

, nearly all of which (96 per cent) were filed electronically. Of the returns processed by the CRA so far, two-thirds of them claimed a refund, with the average refund being $2,000. Given that last tax filing season, nearly 32 million personal T1 returns were filed for the 2024 tax year, most of us have yet to file.

So, as you sit down this weekend to gather your slips, receipts and other tax information to begin the annual filing process, here are five tax tips to consider.

Report foreign exchange gains

If you sold shares denominated in foreign currency, or perhaps foreign real estate, in 2025, your capital gain (or loss) on disposition would include a foreign currency component. For these transactions, you should use the actual foreign exchange rate that was in effect on the day of the transaction. So, you would convert the proceeds to Canadian dollars using the exchange rate on the date of sale, and compare that to the adjusted cost base (ACB) or tax cost of the property using the foreign exchange rate on the date of purchase of the property.

For example, let’s say Isaac bought 1,000 shares of a U.S. stock on Nov. 8, 2012, when the price was US$10 per share, and the U.S. dollar was at par with the Canadian dollar. By November 2025, the price of the shares had fallen to US$8 per share, and Isaac decided to sell his position with a view to using this loss against other realized gains.

So, on November 25, 2025, when the U.S. dollar was trading at $1.41, Isaac sold his U.S. shares for US$8,000, yielding proceeds of $11,280. So, what initially appeared to be an accrued capital loss of US$2,000 (US$10,000 – US$8,000) turned out to be a capital gain of $1,280 ($11,280 – $10,000) for Canadian tax purposes.

Note that Isaac is required to report the foreign exchange component of the disposition on his 2025 return even if he doesn’t actually convert the US$8,000 back to Canadian dollars, which may be the case if he has a U.S. dollar non-registered trading account, and he leaves the funds in that account in U.S. dollars for future trades.

Declare foreign assets

If you owned “specified foreign property” where the total cost at any time in 2025 was more than $100,000, you’re required to complete and file

Form T1135

, Foreign Income Verification Statement.

Remember that shares of foreign corporations such as Apple Inc. or Nvidia Corp. must also be disclosed, even if held in a Canadian non-registered brokerage account. Failure to report foreign property on the T1135 can lead to

late-filing penalties

of $25 per day to a maximum of $2,500, plus arrears interest, for each taxation year in which you fail to file the form.

Split your pension income

Pension splitting allows you to save

income tax

where one spouse is in a lower tax bracket upon retirement than the other, and may also allow you to preserve income-tested government benefits and credits, such as your

Old Age Security

(

OAS

) pension or the age credit. Any pension income that qualifies for the federal pension income credit also qualifies to be split. This includes withdrawals from your

registered retirement income fund

(

RRIF

) once you’re over 65.

To reap the benefits of pension splitting for 2025, both you and your spouse must complete CRA

Form T1032

, Joint Election to Split Pension Income, and file the forms with your tax returns.

Claim your medical expenses

The non-refundable medical expense tax credit (METC) can be claimed for medical expenses that were not covered by your provincial, group or private health insurance plan. For your 2025 return, the METC is available provided your family’s total medical expenses exceed a minimum threshold equal to the lesser of three per cent of your net income or $2,834. You can also claim a provincial or territorial credit, with the minimum medical expense threshold varying by jurisdiction. Qualifying expenses include those you paid for yourself, your spouse or partner, and your kids under the age of 18.

Perhaps the most overlooked medical expense that can potentially help put you over the minimum spend threshold limit is the premiums you may have paid to a private health-services plan (such as medical or dental plan), assuming the cost wasn’t fully paid for by your employer. If you’re an employee, be sure to check Box 85 of your 2025 T4 slip, for the amount of premiums you may be able to claim as a medical expense for 2025. The software (or your accountant) should properly pick this up, but only if it’s entered, so be sure to double-check this yourself.

Pool your donations

While there are numerous personal tax credits, most are at the 14.5 per cent federal credit rate (for 2025). The donation credit is three-tiered, which leads to a potential planning opportunity.

If you made a charitable donation in 2025, you get a federal credit of 14.5 per cent for the first $200 of annual charitable donations, but the federal credit rate jumps to 29 per cent for cumulative donations above $200 (or 33 per cent to the extent you have income subject to the top federal rate, which is income of more than $253,414 in 2025).

In most provinces, parallel provincial credits work similarly, providing most Canadians with a minimum combined federal/provincial tax credit worth at least 40 per cent for donations above $200 annually. Alberta is the exception as it offers a 60 per cent provincial donation credit on the first $200 of annual donations.

Because of the lower threshold on donations below $200, if your donations were below that level in 2025, you might consider pooling donations with your spouse or partner (if applicable) and putting them on the same return if together they will exceed the $200 limit. Alternatively, unclaimed donations can be carried forward for up to five tax years, so you may wish to postpone claiming small amounts of donations until the cumulative amount is more than $200 in a future year.

Jamie Golombek,
FCPA, FCA, CFP, CLU, TEP, is the managing director, Tax & Estate Planning with CIBC Private Wealth in Toronto.
Jamie.Golombek@cibc.com

.

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