Tax season is nearly upon us. Ok, enough groaning; it’s not as bad as we all make it seem. And getting to know your finances a little more intimately is never a bad thing. But before you file this year, we’ve compiled a quick list of facts you should review, because 2020 brought with it some surprises and supports, like the CERB and CRB.
If you are an individual who works for one employer and you don’t have any dependents, then filling your taxes is very straightforward, and one of the CRA’s certified Netfile software options will walk you through the process quite easily. Simply make sure you have all your tax slips together when you start.
If you are a business owner, you may want to consider hiring a tax professional like a bookkeeper or an accountant. Sole proprietors can file on their own, the same way individuals would, but if your business is complicated or you have many expenses, it’s probably still best to get a tax professional to help you out.
Quick Facts You Need to Know About filling your 2020 Taxes:
- The tax filing deadline is April 30, 2021 for individuals.
- The tax filing deadline for self-employed individuals is June 15, 2021.
- But, if you owe taxes, the payment deadline is April 30, 2021. If you don’t pay by April 30, you will have interest charged on what you owe.
- If you cannot make the full payment due by April 30, you can make arrangements with the CRA directly to pay by installments.
- If you received CERB or CRB, you’ll be getting a T4A or a T4E with info for your return. These slips will also be available online.
- CERB is taxable, so you will have to pay tax on the monthly $2000. How much you have to pay will depend on your income for 2020.
- If you received CRB, CRSB, or CRCB, they were already taxed 10%. Depending on your income for 2020, you may have to pay more or less than that original 10%.
- New for this year, if you don’t receive your necessary tax forms in the mail on time, you may be able to retrieve them from your My Service Canada account as of February 2021.
- File online because paper filing is likely going to be delayed because of COVID-19.
- Signing up for direct deposit is the fastest way to receive any return you may be eligible for.
- The personal information you’ll need to provide will include marital status, number of children in your care, banking information, your home address.
- The slips you may need to file are the T4, T5, T3, T2202, RC62, RC210, and RRSP Contribution receipts, as well as any receipts for deductions.
- If you are a sole proprietor, you’ll need your income information. You can fill out a T2125 form if you like, or just make sure you have your info ready for your accountant. Check with your accountant what they will need from you.
- Canadians who were employees in 2020 and had to work from home for more than 50% of their work time for four consecutive weeks in 2020 due to Covid-19 can claim $2 per day you worked at home, up to $400 maximum.
- There is a chatbot on the CRA website to help you if you have questions.
Let’s Chat Taxes and Chatbots
How do you feel about asking your tax questions to a chatbot? Let us know in the comments. We’d love to chat about how our area of expertise is being used to help people at tax time.