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Managing financial records is often a daunting task for the average taxpayer, especially given the unprecedented challenges of the past year. Maximize your year-end tax return isn’t just a goal; it’s a necessity in these complex times. With many adapting to remote work and navigating the unexpected hurdles of 2020, tax preparation may seem more intricate than ever. This guide will provide essential tips to simplify your tax process. Ensuring you’re well-equipped to tackle the unique challenges this tax season presents.

CERB is Taxable Income

When you received the Canada Emergency Response Benefit (CERB) in 2020, you should know that the Government will tax it as income. Unlike income from labour, where income tax is deducted automatically, the tax on the CERB was not deducted before the funds were transferred. Don’t worry about figuring this out: The government will issue T4A slips indicating the total amount of CERB a person has received. The amount on the slips is the amount you must declare as income when filing your 2020 income tax return.

In response to how lockouts and physical isolation affected work, the Federal Government has released other benefits: the Canada Recovery Benefit (CRB), the Canada Recovery Sickness Benefit (CRSB), and the Canada Recovery Caregiving Benefit (CRCB).

However, depending on your marginal tax rate, recipients still owe the difference based on your total taxable income in 2020. With CRB, for example, if their net income exceeded $38,000 in 2020, you may have to repay some of it.

Work From Home

Workers would offset some of the tax if the pandemic and government restrictions forced them to work from home, including spending on the home office and household connections such as electricity, heat and water. We do not yet know how the Canadian Tax Authority will investigate and investigate these allegations. All workers should track when they started working at a distance, how often and for how long.

Employees can claim home office expenses if they use the room for at least half of the total working time. This rule covers the whole year, but since many people work only part of the year from home, the rating agency will assess the cases individually. The rating agency bases its rating on the office’s size based on the house’s total square footage.

The employer’s documents must use the T2200 form: the explanation of the terms of employment. Any expenses provided or reimbursed by the employer, such as office supplies or home Internet access, cannot be claimed.

Taxes are due on the same dates as every other year.

Individual tax returns and payments are due on 30 April, and self-employed people on 15 June. The rating agency could order an extension of the deadline but has not announced it. Make sure you are still completing your taxes and making all payments due on time.

Consider getting your taxes done professionally.

Everyone can file their taxes, but this year will differ from any we’ve seen. Taxpayers will have to deal with new issues and factors, especially if they have moved into a home office or own a small business. Auditors are here to ensure their clients don’t miss any documents or records.

Like any other company, auditors and tax collection services must follow security procedures connected with COVID-19. We are working to help customers complete their returns without having to sit down in person. If you are unsure about this year’s tax season, contact us today! Maximize your year-end tax return with us; we’re just a call away!

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