10 things to know before filing your tax return this year

Posted on by Duane Roberts

Taxes Personal Finances

Jamie Golombek: Tax season is in full swing and those who have already applied and requested a refund are getting an average of $2,145 back

Publication date:

Mar 10 2022 • 2 days ago • 5 minutes read • 19 Comments A mailbox outside the CRA's Toronto office. To date, the tax authorities have received just over 2.4 million returns, 95 percent of which have been filed electronically. A mailbox outside the CRA’s Toronto office. To date, the tax authorities have received just over 2.4 million returns, 95 percent of which have been filed electronically. Photo by Peter J. Thompson/National Post

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Tax season is in full swing. Electronic filing began on February 21 and the Canada Revenue Agency has received just over 2.4 million returns to date, 95 percent of which are electronic. Just over two-thirds of tax filers have filed for refunds on their 2021 returns, with an average refund of $2,145.

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Here are 10 things to keep in mind as you work your way through this tax season.

The deadline

The normal tax filing deadline for most individuals is usually April 30, but you have until May 2 of this year to file because April 30 falls on a Saturday. If you or your spouse or cohabiting partner had an independent income in 2021, you have until 15 June to submit your tax return(s). In either case, if you have any outstanding balance, it must be received or processed at a Canadian financial institution on or before May 2, 2022 to be considered paid on time.

COVID-19 benefits

If you received COVID-19 benefits, such as the Canada Recovery Benefit administered by the CRA in 2021, you should have received a T4A tax return from the government by February. (Quebec residents would also have been given an RL-1.)

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It’s important to keep in mind that some tax was withheld at source when paying the COVID-19 benefits, but you may be subject to additional tax on top of that. The CRA has recognized that this could pose significant financial hardship for some taxpayers. Affected individuals may want to take advantage of the CRA’s comprehensive payment plans, giving you more time and flexibility to pay the tax due, based on your financial situation.

A COVID-19 benefit check. A COVID-19 benefit check. Photo by Peter J. Thompson/National Post

One-time payment for seniors

Seniors eligible for retirement pension in June 2021 and born on or before June 30, 1947 (meaning they will turn 75 on July 1, 2022) received a one-time payment of $500 in August 2021. All eligible seniors, regardless of the income level, received the payment of $500, which was intended to “support the higher spending of older seniors”, and was estimated to apply to 3.3 million people.

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Most eligible seniors have now received a T4A slip from Service Canada for this amount, but some slips may have been delayed and will go out the week of March 14, 2022. A small number received an incorrect slip, with double amounts in boxes 018 and 205. Amended slips were issued to these persons, so make sure you use the correct slip when filling in your tax return.

Climate action incentive payment

If you are a resident of Alberta, Saskatchewan, Manitoba, or Ontario, stop claiming your Climate Action Incentive (CAI) on your tax return. Instead, you will automatically receive your CAI payments four times a year, beginning in July 2022, provided you file a 2021 return and are eligible for payments. The July payment includes an amount retroactive to April 2022 and future payments will be made on April 15, July, October and January.

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Home office costs

If you worked from home in 2021 because of COVID-19, you may qualify for a deduction of up to $500 per year for home office expenses in 2021 using the temporary flat rate method. Or maybe you can declare your actual cost according to the detailed method.

Eligible School Supply Tax Credit

This tax credit has been expanded and enriched for 2021 to allow educators to claim a 25 percent refundable tax credit for purchases up to $1,000 on eligible learning resources purchased in 2021. The government has also expanded the list of eligible learning resources to include electronic devices, such as calculators, digital timers and distance learning tools.

Teachers can claim a 25 percent refundable tax credit for purchases up to $1,000 on eligible teaching supplies purchased in 2021. Educators can claim a 25 percent refundable tax credit for purchases up to $1,000 on eligible teaching supplies purchased in 2021. Photo by Carl Recine/Reuters

Add your email address for My Account

As a fraud prevention initiative, from February 7, 2022, it will be mandatory to provide the CRA with an email address to access the online My Account portal. This allows the CRA to notify taxpayers in real time of any changes made to their account to ensure such changes are authorized. The CRA has also added multi-factor authentication for all users and you are now required to enter a one-time access code every time you log into the CRA’s digital services.

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Taxpayers have the option of receiving paper or email notices when CRA correspondence is available for electronic display in My Account. But be warned, if you select the electronic reporting option and miss an important email from the CRA, you could end up with interest and penalties, as a 2021 case showed.

Autofill my return

This CRA service has been expanded for 2022 and can now provide downloaded tax slip information, including Registered Retirement Savings Plan (RRSP) contributions for 2021 and the previous five tax years (instead of four), which could aid in filing older returns.

Automated Callback Service

If you become frustrated while waiting to speak to a CRA agent, a new service (“when available”) allows you to request a callback. The service may be available to callers on the individual tax, benefits, and business information lines, but only at certain times of the day and only when the wait times reach a certain (unspecified) length.

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The landing page for the Canada Emergency Response Benefit.

Another taxpayer loses his case for CERB payments in court

Companies are required to maintain records and receipts to substantiate their tax claims.

Run a company? Better keep all those receipts with you for a long time to avoid tax problems

No matter how much you decide to contribute this RRSP season, it's important to stay within your contribution limit or pay a penalty tax of one percent per month for every dollar you contribute too much.

Tips so that you don’t go to court for contributing too much to your RRSP

The detailed claim method requires you to add up all the costs incurred and ensure that you have receipts and backup documentation for each claim.

Everything you need to know about declaring home office expenses on your tax return

Tax discount for digital news subscription

Finally, if you’re reading this article online and you paid for the digital newspaper app or website, you may be eligible for the digital news subscription tax credit, worth 15 percent on qualifying expenses up to $500 for amounts you pay. paid in 2021. You must have paid the amounts to a qualified Canadian journalistic organization for a digital news subscription with content that is primarily written news. A list of eligible digital news subscriptions can be found online.

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If your subscription includes both hard copy and online digital access, only the cost of a standalone digital subscription (or equivalent) is eligible. If there isn’t a standalone or similar plan, you can only claim 50 percent of the cost as an eligible expense.

Jamie Golombek, CPA, CA, CFP, CLU, TEP is the General Manager, Tax & Estate Planning at CIBC Private Wealth in Toronto. Jamie.Golombek@cibc.com

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This post 10 things to know before filing your tax return this year

was original published at “https://financialpost.com/personal-finance/taxes/10-things-to-know-before-you-file-your-tax-return-this-year”

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