Tax season is fast approaching, which can be a confusing and stressful time for some Canadians.
To help ease the stress, CTVNews.ca spoke with three experts in the Canadian tax sphere to help Canadians prepare.
IMPORTANT DATES TO KNOW
The biggest date to know is March 1, which is the deadline for RRSP contributions to count for this tax season.
Josee Cabral, a spokesperson for H&R Block, told CTVNews.ca that there is no “golden rule” for how much Canadians should be looking to contribute to maximize their tax return, but that tax experts can do that math in advance, if you’re prepared early enough.
“It all depends on your income and what other deductions that you’re entering,” she said in a recent virtual interview.
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“I always let people know if you get your T4 in advance, send it over to me. I’ll do a simulation. I’ll enter your T4 and I’ll give you examples of what is the best amount in your situation for you to have the best refund possible.”
The second big date is traditionally April 30, which is the tax filing deadline if you owe taxes, but because the deadline is a Saturday, Canadians won’t have to file until the next business day: May 2.
If you are self-employed, you have until June 15 to file your return, but if you owe taxes, you still need to pay by May 2.
COVID-19 MEASURES AND HOW THEY AFFECT YOUR TAXES
Michael Espinoza, a senior manager with Grant Thornton, said that if you were among the Canadians to make use of either the Canada Recovery Sickness Benefit, Canada Recovery Caregiving Benefit, or the Canada Worker Lockdown Benefit, they need to be included as your taxable income for the year.
“Depending on what kind of benefits you may have received, you may also be receiving a slip — T4A or T4B — from the Canada Revenue Agency outlining the amounts that you would have received, and these amounts are taxable, so they do need to be reported,” he said.
Additionally, the popular $400 work-from-home benefit from last yearxjmtzyw has been expanded to $500 because the benefit in 2020 really only began in March 2020, compared to the full year this time around.
“It could be for things like office chairs, office desks, any other sort of computer equipment, printer, for example, things that you would have needed to work from home and would make working from a lot easier,” Espinoza said.
If you’ve been working from home in 2021 and spent more than $500 home office expenses, you can have your employer fill out a T2200 or T2200s form, which allows you to claim the actual amount you paid in home office expenses, provided you have the documentation to prove it.
In addition to office supplies, Cobral said employees can now claim personal protective equipment (PPE) if they need it for work.
“As long as you have the receipts, you can go ahead and claim it,” she said. “Of course, if you’re only claiming PPE, it’s not a very big deduction, so you would want to add on your rent, your electricity, your phone bill and any kind of supplies that you need to purchase to work from home.”
Sunny Widerman, CEO of Personal Tax Advisors in Toronto, said for the most part those who rent will find it more advantageous to fill out the form, while those with a mortgage will be better off taking the $500 deduction.
“When you are a salaried employee, certain types of overhead costs, you’re not allowed to deduct and the biggest one actually that you’re not allowed to deduct is mortgage interest, and that is a big part of the cost for a person who is working from a home,” she said in a phone interview.
“Whereas a person paying rent, they can just take their whole rent payment, which may include the landlord’s mortgage interest and could include the landlord’s property tax, but they get to write off the whole thing.”
The CRA has also created a calculator to determine which of the methods is best for you.
OTHER EXPANDED BENEFITS
While this year is fairly light on expanded taxable credits, one that did receive a boost is designed for teachers. Espinoza said teachers can claim up to $1,000 in eligible work expenses and receive a 25-per-cent refund, up from 15 per cent last year.
“Even if you don’t owe any taxes, you can still actually get the money back,” he said. “That’s something that if you do qualify for it, keep your receipts and then claim the amount.”
Cobral added that many people don’t know that Canadians are eligible to claim some medical expenses, such as dental fees.
“You do have to have a certain amount for it to become interesting, but I always let my customers know we might as well enter it and then we’ll see if you get something out of it,” she said.
TIPS FOR A SUCCESSFUL FILING
All three experts agreed that organization is key to a successful tax season, which includes keeping any expense receipts handy and safe.
“I always recommend that you keep your receipts, keep them in a nice, secure place,” Espinoza said. “If you can scan them into your computer and save them on an external hard drive… Just make sure you have the backup, because if CRA does come knocking on the door or a phone call, you have what you need to provide.”
Cobral added that those who receive a T4 slip early may want to wait before filing, because other important documentation may still be on the way.
“One thing to avoid is filing too early, making mistakes on your income tax and then you get reassessed by the government,” she said. “It could be for a positive, but most of the time when you get reassessed, you end up owing money.”
“It’s best to wait a little bit. The month of March is always ideal.”
Winderman said it’s important people understand that if someone makes a mistake on their tax filling, it’s not a big deal and can be adjusted.
“People don’t know that things can be fixed,” she said. “If you made a mistake, it can be fixed. It’s a pain, don’t get me wrong, it’s like everything, fixing it takes more work than getting it right in the first place, but you can fix it.”
Widerman added that this is the season need to be on the lookout for potential fraud related to people impersonating the CRA. She said that the agency will never send an email with a dollar amount on it, just an email that there’s a notice on their account to check.
“If you get an email purporting to be from CRA and it’s got specifics in it like an actual figure … anything specific, that’s not from CRA because their messages only say: ‘There’s a notice for you. Go log in.’”
SOCIAL PROGRAMS ARE AVAILABLE TO HELP
On top of the tax companies that can help with tax filings, Espinoza said there are programs out there for some people who help Canadians file their taxes for free.
Depending on your individual circumstances, the Canada Revenue Agency hosts free tax clinics where a team of volunteers can help you with filing your taxes.
Espinoza, who used to volunteer at these clinics, said they’re typically focused on lower-income individuals and people with disabilities who may need some help.
“There’s usually an income threshold and you’re evaluated and basically you can go and get your tax return done for free by volunteers, by accountants like me or someone who’s qualified to do the tax return,” he said.
“It’s a great program… and oftentimes I think a lot people don’t know about it.”
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The T1 General tax form for 2015 is shown in this recent photo. THE CANADIAN PRESS/Graeme Roy
