Tax season is here, and the stress is real. Taking a long, hard look at our funds (or lack thereof) can be intimidating.
Martha Adams, Certified Financial Planner, TIER One Investments says, "we are essentially cramming an entire year's worth of information into a matter of days. That can be incredibly overwhelming especially when we think we need to go at it alone."
She adds, "if you haven't filed in years for any number of reasons, often we have negative emotions surrounding this fact. This is not uncommon as a task that is already unenjoyable, compounded by multiple years, can seem insurmountable." Hiring a professional can help alleviate the fears of filing on your own.
"The key is on-time filing. If you owe money, filing on-time means that you're not paying any unnecessary interest and charges. If money is owed to you and you don't file on time it is being held interest free. In addition, if you have government benefits that you qualify for, the only way that you know is by filing."
Where you work can also affect how you file. The latest Statistics Canada Report conveys that more than 1.7 million paid employees work from home.
Claiming deductions on your taxes when you work from home
You must meet one of the following requirements:
- work from home more than 50% of the time
- use the home work space only to earn your employment income
- Home office expenses cannot be used to create or increase a net loss. Expenses can only bring any profit down to zero at best. Any expenses not used can be carried forward until you can use them
Adams goes on to say you cannot create a loss from claiming home office expenses, and you cannot apply the expenses to other income. You can carry forward unused expenses to the following year, as long as the income is from the same employer. If you rent your home, you can deduct the percentage of rent and maintenance costs related to the work space.
You will need to complete Form T2200 (Declaration of Conditions of Employment). This must be signed by your employer. You can't simply decide you work from home.
Deductible expenses can include the cost of electricity, heating, maintenance, property taxes and home insurance.
The Government of Canada website has useful tips and tools, including what's new this year:
The Canada Caregiver Credit
- If you live with a spouse, child, parent or other dependent with impaired physical or mental abilities, this credit may apply to you
- MyCRA is an app for individuals that lets you securely access key portions of your tax information and pay your tax balance
Medical Expense Tax Credit
- 1) for expenses related to service animals. Includes the cost of the animal, food and veterinary care, as well as expenses paid for the patient to attend a training institution
- 2) expenses incurred to conceive a child are now eligible, even if you have no other medical conditions. It is retroactive, which means you can request a change to your income tax returns over the last ten years in order to include fertility-related expenses
Climate Action Incentive (CAI) payment
- Can be claimed by eligible individuals who are residents of Saskatchewan, Manitoba, Ontario or New Brunswick. A new Schedule 14 will be included with the T1 package for these jurisdictions; simply complete the new schedule to claim the amounts you may be entitled to based on your family composition, and indicate the amount on line 449 of your income tax and benefit return