Our office will start accepting tax returns on Tuesday, February 22, 2022. Feel free to visit us Monday thru Thursday from 10am-3pm at 300 Terry Fox Drive, Suite 1000, Kanata or email us at: firstname.lastname@example.org
Tax time is a good time to take a closer look at your finances and think about ways to improve your tax position. Below we outline important issues, deadlines and tax tips that you should consider. While these suggestions can be helpful when considering your annual tax return, don’t forget that scheduling regular reviews with your Tax Advisor and Financial Advisor can help ensure you are tax efficient all year round.
***Important Update for CPP & OAS Recipients***
Older seniors’ one-time support payment of $500 is to be reported as taxable income. Clients will receive a corrected t-slip by March 14th from the CRA due to a CRA administrative error. This error may effect your CPP and OAS slips as well. Existing tax clients can bring in their taxes before receiving these slips since our Tax Specialists can see your information from the CRA anyways.
What are we charging to do your 2021 Tax Return?
$65 for anyone over the age of 65. $110 for individuals and $200 for couples under the age of 65. We suggest using the Tax Checklists we provide to prevent any additional costs. You may download our Tax Checklist pdfs here:
If you moved to another province/territory, remember that your province/territory of residence on December 31, 2021, may be the one that you pay your taxes to in respect of all income earned in 2021.
Did you sell your Home?
If you sold your principal residence this year you must disclose and report certain information about the sale in your 2021 personal income tax return. Keep any documents related to the sale on hand for when you prepare your personal income tax return. If you fail to report the sale as required, the sale may become taxable because you won’t qualify for a “principal residence exemption” on any capital gain that arises from the sale.
Do you have Receipts from Home Renovations?
Ontario’s Seniors Home Safety Tax Credit might be a good fit for you. The Seniors’ Home Safety Tax Credit is a refundable personal income tax credit worth 25 percent of up to $10,000 per household in eligible expenses, a maximum credit of $2,500. This credit can be shared by people who live together, including spouses and common-law partners.
Pension Income Splitting
It’s potentially a good way to save on your taxes if you are over 65. On paper, you can transfer a portion of your pension to your spouse if they have a lower income to reduce your taxes owing/taxes payable. Every year you can decide based on income if this is something you should do to lower your taxes owing. You can split CPP at the source.
Have some money to invest? You can contribute an additional $6,000 into your TFSA in 2022. In most cases, if you have not made any TFSA contributions in previous years you can contribute a total of $81,500. We can help get your contribution room from the CRA so we can maximize these tax savings.
You have until March 1, 2022 to make your RRSP contribution for 2021. Keep in mind these three factors that limit the amount you can contribute:
• A dollar limit ($27,830 for 2021 and $29,210 for 2022)
• A percentage of your previous years’ “earned income” (18%)
• Your pension adjustment
Deducting your RRSP contribution when computing your taxable income reduces your after-tax cost of making that RRSP contribution.
Is it time to wind-up your RRSP?
If you will turn 71 in 2022, you need to wind-up (RRIF) your RRSP by December 31, 2022. Remember that, in this situation you only have until December 31, 2022 (not March 1, 2023) to make a final contribution to your RRSP for 2022. It’s best to discuss the pros and cons with your Tax Advisor and Financial Advisor beforehand. Check out this blog about RRIFs
If you received government assistance as a result of the COVID-19 pandemic in 2021, be prepared to report these payments just like regular income. If you stopped working because of the pandemic and received the Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB) or Canada Recovery Caregiving Benefit (CRCB), you must report these taxable benefits on your 2021 income tax return. The government will provide a T4A tax slip.
If you received a federal COVID-19 benefit in 2020 such as the CRB, CRSB or CRCB but repaid it in 2021, you can either request an adjustment to claim a deduction for this repayment on your 2020 income tax return, or claim a deduction on your 2021 income tax return.
If your employer asked you to work from home during the COVID-19 pandemic, you may be able to claim home office expenses, as long as your employer doesn’t directly reimburse these expenses. You should maintain full records of any workspace expenses and keep receipts for any eligible home office supplies. The CRA expanded the list of eligible expenses to include home internet access fees and introduced a temporary flat rate method to claim home office expenses for 2020. If you used this simplified method, you were able to claim up to $400 without supporting documentation, and without a completed and signed Form T2200, “Declaration of Conditions of Employment” or Form T2200S, “Declaration of Conditions of Employment for Working at Home Due to COVID-19”.
Please down the CRA Tax Forms T2200 and T2200S here:
Even though you only have to file your tax return once a year, taking tax planning steps throughout the year will help you save money at tax time. Our Tax Advisors and Financial Advisors can help you review your personal tax situation along with your investments for maximum efficiency. Contact us with questions or book an appointment today.