Are you ready for the upcoming tax season?
2020 was certainly a doozy of a year, and fortunately, it’s ALMOST over! Of course, 2020 has ended, but there are still some loose ends to tie up, as the 2020 tax season is on the horizon. Things might be a little more complicated when it comes to both your personal and business-related taxes this year, but with some guidance, we can finally close out last year for good!
Some Important Dates
There are many important dates that you need to keep in mind for the upcoming 2020 tax season:
- Feb. 22: Canada Revenue Agency opens eFile for the 2020 tax year.
- Mar. 1: Final deadline to contribute to your RRSP to apply to the 2020 tax year.
- Mar. 1: Final deadline to issues all T4, T4A, and T5 slips.
- Apr. 30: The personal income tax filing due date for those who are NOT self-employed. Taxes payable due for both individuals and those who ARE self-employed.
- Jun. 15: The personal income tax filing due date for those who ARE self-employed. (Note: Taxes payable are due on April 30th.)
- Jun. 15: Deadline to file GST/HST returns for self-employed annual filers with Dec. 31, 2020 year-end.
Tax Deadlines Currently Unchanged
As of now (end of February 2021), all tax deadlines are unchanged, and there do not appear to be any plans for extensions.
This marks a considerable change from the 2019 tax year when the pressures of COVID-19 pushed due dates and deadlines to later in the year. While we’re currently in a very different position than we were in March of 2020, there are still tremendous pressures on both individuals and businesses.
Theoretically, the continued crisis could result in a future announcement from the CRA about potential extensions, but as of now, this isn’t the case. Therefore, you cannot afford to put off your tax preparations, as that could result in late fees and penalties.
Of course, we’ll keep in full contact with our clients about any changes to this state of affairs in the near future.
The Canada Emergency Wage Subsidy (CEWS)
The CEWS is a program introduced earlier last year to help businesses that lost revenue cover part of their employees’ wages, retroactive to March 15th, 2020. It’s taxable for income purposes and must be included in corporate or partnership income tax returns.
If you took advantage of a program like the Canada Emergency Response Benefit (CERB), you need to know that amount is taxable. The CRA did not withhold taxes from the payment, so you will owe taxes on it. You’ll receive a T4A or T4E slip in the mail showing the total amount you collected from CERB in 2020. It will then need to be reported in your personal income tax forms.
If you switched over to one of the new recovery benefit programs after CERB ended (CRB, CRSB, or CRCB), you should know that all of these benefits are also taxable. Taxes were withheld at the source for these programs (10%), but they will still need to be reported in your taxes.
For all of these programs, repaid amounts are not included in your taxable income.
There are also many new benefits and tax credits for those working from home in 2020. If you want to take full advantage of these credits, we highly suggest connecting with us at The Number Works. We can ensure that you get every potential credit to make your tax bill as low as possible for the 2020 tax year.
Working with The Number Works
If you’re working with The Number Works to handle your 2020 taxes, there are a few steps you need to take.
If you are a current client, we ask you to fill out our Client Tax Questionnaire ASAP, including your full name and SIN. There’s new information included in the questionnaire related to COVID-19, so it’s essential that we have this information.
The deadline to upload the completed questionnaire is April 15th so we can meet the April 30th deadline. If the questionnaire is not completed before this date, we cannot guarantee that your taxes will be filed on time, as we’ll need to work on them in order of receipt.
If, on the other hand, you aren’t currently a client of The Number Works but want some help with your personal or small business taxes, we invite you to contact us today! We’ll get you set up so you can take advantage of every COVID-19 tax benefit or credit available to you. You don’t need to stress the tax season when you have The Number Works in your corner!