Tag: Canadian tax season

2020 Tax-Filing Season – What’s New This Year

It’s everyone’s favourite time of year: tax season! Are you ready to file your 2020 taxes?

As a virtual accounting firm, we field many questions from our clients around this time of year. And in 2021, we’ve been getting even more tax questions than usual!

With the pandemic still a significant factor in our lives, many have asked how it will impact their taxes. The existence of the CERB and other emergency benefits have complicated things somewhat, but that’s why The Number Works is here to help!

Here are some of the things you need to know about filing your taxes in 2021.

Emergency Benefits

For many in Canada, the Canadian Emergency Response Benefit (CERB) and other programs, e.g. the Canada Emergency Student Benefit (CESB), were incredible lifelines to help them financially navigate the pandemic. With COVID-19 closing down many businesses, CERB provided more than $81 billion in payments to out-of-work Canadians—but how are you supposed to account for this money in your taxes?

The first thing you need to know is that taxes weren’t withheld when CERB or CESB payments were issued. That means you will need to account for those taxes in your upcoming return. However, unlike with CERB and CESB, 10% taxes were withheld at the source for many other forms of emergency assistance, including the Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB), and Canada Recovery Caregiver Benefit (CRCB).

If you received any emergency benefits in 2020, you should be receiving a T4A (issued by the CRA) and/or a T4E (issued by Service Canada) tax slip(s) in the mail. The information contained in these slips must be entered on your return. If you did not receive these slips in the mail, they should also be available in your online CRA account.

Depending on your situation, there’s also the chance that your emergency benefits might be exempt from taxes, or that you might be able to claim a refund. If you have any specific questions about how emergency benefits will impact your taxes, we invite you to contact us ASAP.

New Benefits and Support

With the significant changes to Canadians’ work statuses in 2020, the government has put new benefits and support structures into place that could impact your 2020 taxes.

For example, home offices have certainly become more popular in the last year. With this in mind, you might be eligible to claim home office expenses on your tax return. We can help you figure out the exact benefits you qualify for, minimizing your tax bill.

If you have any questions about other potential benefits, please don’t hesitate to get in touch with us!

Inaccessible CRA User Accounts

Due to online security concerns, the usernames and passwords of a number of CRA online accounts have been revoked. If you are among the people affected by this, you should have received a notification from the CRA informing you about your account’s status.

Please keep in mind that there are always CRA scams circulating, so if you receive a notification, do NOT share account information with anyone over the phone or through email. Instead, go to the CRA website directly to take steps to recover your account.

Fortunately, the current status of your CRA online account will not impact your ability to file your income taxes using a NETFILE-certified method. However, as your account can contain important tax information, such as your T4 slip, you should take steps ASAP to resolve the situation if you find yourself locked out of your account.

Important Dates

Here are some important dates that you should keep in mind:

April 30th: 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.

June 15th: The personal income tax filing due date for those who ARE self-employed. (Note: Taxes payable are due on April 30th.)

June 15th: Deadline to file GST/HST returns for self-employed annual filers with December 31st, 2020 year-end.

Please keep in mind that, unlike last year, tax deadlines have not changed, and there do not appear to be any plans for extensions. Therefore, putting off preparing your tax returns could result in late fees or penalties.

Working with The Number Works

We fully understand that dealing with your taxes this year might be significantly more stressful than usual. That’s why we are dedicated to making the process for our clients as smooth as possible!

If you are a current client of The Number Works, we ask you to fill out our Client Tax Questionnaire. Please include your full name and SIN in your answers. This questionnaire includes essential information related to COVID-19, so we must receive it as soon as possible. Submissions are due before April 15th so we can meet the April 30th tax deadline. If your questionnaire is not completed before this date, we cannot guarantee that your taxes will be filed on time.

If you aren’t currently a client of The Number Works, we invite you to contact us today! Whether you need help with your personal income tax or your small business, we’d be thrilled to help you get your finances in order and ensure you get every COVID-19 benefit and credit currently available to you!

Canadian Tax Season in a COVID-19 World

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.

Personal Taxes

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!