Spring is around the corner, and along with the warmer weather comes tax season. This month, we would like to share some helpful tips for preparing your 2021 taxes.
Since the traditional deadline of April 30 falls on a Saturday this year, the deadline to file your 2021 tax return is May 2, 2022. If you are self-employed or have a spouse or a common-law partner who is self-employed, the deadline to file your taxes is June 15, but all taxes owed must still be paid by May 2. Filing on time is important, not only to avoid penalties on amounts owing, but also to ensure you receive all the benefits to which you are entitled. The CRA has listed the steps involved in filing your 2021 taxes and other useful information here.
Our Tax Preparation Checklist outlines the information you’ll need to gather to file your tax return. If you were among the many Canadians who received COVID-19 government benefits in 2021, you may also receive a T4A slip from CRA. Payments received from programs such as the Canada Recovery Benefit, the Canada Recovery Caregiving Benefit and the Canada Recovery Sickness Benefit are taxable. The amount shown on your T4A slip needs to be included in your 2021 return.
If you are an employee and worked from home due to the pandemic more than 50 per cent of the time for a period of at least four consecutive weeks, you will likely be able to claim a deduction for home office expenses. Under the flat rate method, you can claim $2 for each day you worked from home to a maximum of $500 in 2021 (up from $400 in 2020). If you have more than $500 in home office expenses, you can use the detailed method to claim the actual amounts you paid, provided you have the supporting documents and a signed T2200S or T2200 form from your employer. You can use CRA’s calculator to determine if the flat rate or detailed method is best for you.
There aren’t many new credits available to taxpayers this year, but teachers should be aware that one credit did receive an increase. Eligible educators can now claim up to $1,000 of eligible supply expenses and receive a 25% refund.
We hope this article helps guide you toward a less stressful and more organized tax season. If you have additional questions regarding how to best manage your cash flow, plan for retirement or improve your overall financial well-being, a Money Coach can help. Our Investment Report Card is also a great option for those of you looking for a second opinion on your investment portfolio.