Annual Message From The Partners
Ahhh, the blissful sound of tax slips and receipts rustling in the hands of excited accountants living out their dreams. The most wonderful time of the year is nearly upon us.
The last two tax seasons passed in what seemed like a constant state of limbo. In retrospect, the endless changes have made us better. We have taken significant steps towards streamlining paperless processes, communicating more efficiently, and embracing technology in ways we haven’t before. It turns out, the last two years were full of silver linings.
Perhaps we are being a little optimistic (that’s just the kind of people we are), but it seems that the “old normal” is right around the corner. We could not be more thrilled! Thrilled for the entrepreneurs who have had to tirelessly navigate through the insanity, thrilled for working parents who had to juggle working and online school, thrilled for students returning to classrooms, thrilled for friends and families being able to gather. The list goes on and on. It feels, in a lot of ways, that the extraordinary reality that we have had to live through provided a much-needed perspective on what is important and what is not to be taken for granted.
It has been an absolute privilege being witnesses to the remarkable resilience of our fabulous clients. We are so grateful for the never-ending source of inspiration. Thank you for your continued support. It, truly, means the world.
It gives us an enormous amount of joy to be able to help and support you in any way we can. Here is to the 2022 tax season – the best one yet!
Steve, Catherine, and Ana
COVID-19 Benefits
Canada Recovery Benefit (“CRB”) was available for eligible employed or self-employed individuals, business owners, and independent contractors. The last period ending for the program was October 10 to 23, 2021. Depending on when you applied for the CRB, an individual may have received either $1,000 ($900 after tax) or $600 ($450 after tax) for a 2-week period.
Canada Recovery Sickness Benefit (“CRSB”) is available for individuals who contracted COVID-19, were required to isolate, or missed work due to COVID-19. They are eligible to receive a 1-week payment of $500 ($450 after tax) which can be applied for up to a total of 6 weeks, between September 27, 2020, to May 7, 2022. Those receiving benefits under the other programs or EI during the same period are not eligible.
Canada Recovery Caregiving Benefit (“CRCB”) assists individuals who are unable to work because they are providing care to a child under the age of 12, or a family member that requires supervised care. This is a weekly application in which you can receive $500 ($450 after tax) and each household may apply for up to a total of 44 weeks, between September 27, 2020, to May 7, 2022.
Canada Worker Lockdown Benefit (“CWLB”) provides temporary income support to employed and self-employed individuals who cannot work due to a COVID-19 lockdown. The CWLB is only available when a COVID-19 lockdown order is designated for their region. If eligible for the CWLB, individuals can receive $300 ($270 after tax) for each 1-week period. The program is available for any applicable lockdown weeks in their region, between October 24, 2021, to May 7, 2022.
Repayment of COVID-19 Benefits – If in 2021, you repaid federal COVID-19 benefits (CERB, CESB, CRB, CRCB, or CRSB) which were collected in 2020, the amount repaid will be reported in box 201 of your T4A slip, or on your T4E slip along with other employment insurance (EI) amounts repaid. You can choose to claim a deduction on your return for the repayment in the year that the benefit was received, or in the year that the benefit was repaid. You may also choose to split the deduction between these two returns, as long as the total deduction is not more than the amount repaid.
For more information for all these programs visit: https://www.canada.ca/en/services/benefits/covid19-emergency-benefits.html
Home Office Expenses
Consistent with last year, if you were required to work from home due to COVID for over 50% of the time, for a period of at least four consecutive weeks in the year, you may be able to claim the workspace in the home expenses. You have the option of electing to use the
Temporary Flat Rate Method or the Detailed Method. However, under the temporary flat rate method, the maximum number of days has been increased from 200 to 250 days, providing a maximum credit of $500. As a reminder, if using the detailed method, capital expenses such as furniture cannot be claimed and the form T2200S signed by your employer must be obtained.
Automobile Deductions & Benefits
Individuals using corporately-owned vehicles for personal use are required to include a taxable benefit in their income. The formula includes a predefined benefit cost per kilometre of personal use. For 2021, the benefit cost was reduced from $0.28 to $0.27 per kilometre. Those who are in the business of primarily selling or leasing automobiles have a reduced rate of $0.24 per kilometre (decreased from $0.25).
In addition, the Government recognizes that lockdowns and public health measures may have skewed the ratio of personal vs. business driving. To mitigate the taxable benefit of the increased personal driving, employees are allowed to use their 2019 automobile usage to determine their eligibility for the reduced standby charge. In order to use the 2019 ratio, the automobile must be provided by the same employer as in 2019.
Digital Subscription Tax Credit
Individuals who have paid for a subscription to a Qualified Canadian journalism organization (QCJO) may be eligible for a non-refundable tax credit. Annual qualifying subscription expenses (maximum of $500) are eligible for a 15% tax credit. This credit is available up to and including the 2024 taxation year.
Reminders
Filing Deadlines – April 30th falls on a Saturday this year. As a result, personal tax returns will be considered filed on time if received on or before May 2, 2022. Self-employed individuals and their partners’ filing due date is June 15th. Regardless of your filing deadline, tax owing is due by May 2, 2022, otherwise the balance will attract 5% interest, compounded daily. Late filed returns will attract a 5% penalty on the balance owing plus 1% for each full month the return is outstanding.
RRSP Contributions – March 1, 2022, is the RRSP contribution deadline. The deduction can be used in either 2021 or 2022 tax filings, subject to your RRSP room available. Review your 2020 Notice of Assessment for your available room, or check online with CRA “My Account”, if registered. An overcontribution above $2,000 will trigger a 1% monthly penalty.
TFSA Contributions – Canadian residents over 18 years of age can open a tax-free-savings account (TFSA). The annual limit for 2021 and 2022 is $6,000.
Late Slips – Typically, T3 (trust) and T5013 (partnership) slips are not issued until the end of March and foreign slips can be even later. If you receive a late or amended slip after filing, please notify us as soon as possible to amend your return. The CRA’s matching program will identify any missing slips and impose penalties.
Paying CRA – Three payment options:
- Pre-Authorized Debit (PAD): A one time draw directly from your bank account on a specified withdrawal date. The PAD form must be filed at least 5 days before the withdrawal date and therefore must be submitted by April 25th to meet the April 30th deadline.
- Online: Sign-in through your financial institution and add CRA as a payee. Your account number would be your 9-digit SIN.
- Remittance Voucher: We can issue a voucher that you can mail with a cheque or take to your bank for a direct transfer.