2021 was another unprecedented year, causing significant financial stress or disruptions for millions of Canadians.
With so many changes in such a short amount of time, there’s a lot of uncertainty around the 2021 tax season.
We all know we have to file our taxes by April 30th, but a lot of us are curious as to how COVID-19 will affect how/what we claim … and that’s why Sousa Bookkeeping is here to help!
Enter the Form Below for a chance to win a FREE Basic tax return from Sousa Bookkeeping & Taxes (Up to $50 value)
2021 Tax Tips:
Tip # 1: Don’t assume that you do not need to file a tax return because you have no income.
Tip # 2: Be sure to claim all eligible medical expenses.
Tip # 3: CRA would never use text messaging or social media to contact taxpayers about tax-related issues.
Tip # 4: Some of the easiest ways to avoid delays to your tax and benefit affairs are to:
- Sign up for direct deposit
- File your tax return online
- Make sure that your address and personal information is up to date
- The CRA recommends signing up for My Account as a quick and easy way to manage and keep
track of your tax and benefit information
Tip # 5: Filing dates for 2021 taxes
- Mar 1, 2022: Deadline to contribute to an RRSP, a PRPP, or an SPP
- May 2, 2022: (since April 30 is a saturday) deadline to file your taxes
- Jun 15, 2022: Deadline to file your taxes if you or your spouse or common-law partner are self-employed
Tip # 6: Penalty for filing your tax return late
- If you file your tax return after the due date and have a balance owing, you will be charged a late-filing penalty
- The late-filing penalty is 5%of your 2021 balance owing, plus an additional 1% for each full month you file after the due date, to a maximum of 12 months
- If the CRAcharged a late-filing penalty for 2018, 2019 or 2020 and requested a formal demand for a return, your late-filing penalty for 2021 will be 10% of your balance owing. You will be charged an additional 2% for each full month that you file after the due date, to a maximum of 20 months.
Tip # 7: Where an individual receives CWLB in 2021, their benefits will be reversed if they do not file their 2021 income tax return by December 31, 2022. Similarly, an individual receiving CWLB benefits in 2022 will lose entitlement if they do not file their 2021- & 2022-income tax returns by December 31, 2023.
Tip # 8: Canada recovery benefit (CRB)
The applicant must repay 50% of income earned in that year above $38,000, up to the total amount of CRB received by them in the year. In general, income for this purpose is income as defined in the Income Tax Act, excluding benefits paid under CRB.
Tip # 9: T4A slips to be issued for the various COVID-19 emergency and recovery benefits:
- Canada Emergency Response Benefit (CERB)
- Canada Emergency Student Benefit (CESB)
- CRB, CRSB and CRC
Contact CRA AT 1-800-959-8281 if the T4A slip appears incorrect or if you did not apply for any benefits.
Tip # 10: Benefits provided through Service Canada will be reported on a T4E slip.
Tip # 11: Individuals who have already repaid CERB due to their net income being less than $5,000 (but meeting all other eligibility criteria), will need to apply to the Minister of Employment and Social Development in writing (by completing Form T180) to receive a refund of their repayment.
Tip # 12: T2200S Declaration of Conditions of Employment for Working at Home Due to COVID-19
- Temporary Flat Rate (TFR) – for employees who claim a flat amount ($2/day to a maximum of $500 for 2021). No documentation will be required.
- the employee worked from home due to the COVID-19 pandemic
- the employee worked more than 50% of the time from home for a period of at least four consecutive weeks in the year
- the employee is not claiming any other employment expenses; and
- the employer did not reimburse all the employee’s home office expenses
- If the employer reimbursed some of the home office expenses, the employee can still make a claim
- Simplified Detailed Method – for employees who claim actual expenses related to working from home, supported by receipts. Employer documentation will still be needed.
Tip # 13: Climate action incentive will change to quarterly payment commencing in 2022.
- The first payment will be made in July 2022
- First payment will be double for the first two quarters of 2022
- Future payments will be made each January, April, July, and October
- Tax return MUST be filed to receive the credit
Tip # 14: School supplies tax credit from 15% to 25% and expand the eligibility criteria to include electronic devices used by eligible educators;
- The limit of $1,000 of eligible supplies will be unchanged
Tip # 15: Canada Pension Plan: Employee/Employer Self-Employed – 2022
- Earnings: 64,900
- Rate: 5.7% Employee/Employer (each)
- Maximum: 3,500 (Employee/Employer) and 7,000.00 (Self-Employed)
Tip # 16: Employment Insurance: Employee/Employer – 2022
- Earnings: 60,100
- Rate: Employee-1.58% Employer-2.21%
- Maximum: Employee (953.00) and Employer (1,334.00)