As you prepare to file your taxes you may be asking yourself if you should leave it to a professional.
“There are a lot of credits and a lot of deductions that not everyone necessarily knows about,” said Kurt Oeschlagel, partner and chartered accountant at BDO Canada in Hanover. “There are certain things that have to be filed with the government that if you don’t file them can result in some pretty significant penalties.”
The pandemic’s impacts are still being felt with programs like the Canada Recovery Benefit, Canada Recovery Sickness Benefit, Canada Recovery Caregiver Benefit affecting what some people include in their returns.
For those who had to rely on those benefits, Oeschlagel says they will be getting tax slips and those benefits are taxable.
“They had 10 per cent taken off at its source which is unfortunately not a very high rate for tax.”
Simplified method for claiming home office expenses is back again for 2021. Two dollars per day to a maximum of $500.
“If you do the simplified there’s no form requirement, there’s nothing you have to get signed by your employer, you don’t have to have receipts or invoices, you don’t need any supporting documentation,” Oeschlagel said.
To qualify you must have been working from home for more than 50 per cent of the time for a period of four consecutive weeks. Your employer cannot have reimbursed you for all your home office expenses.
“If your employer reimbursed you for some, that’s fine, you can still claim the simplified method” he said. ”
If you want to claim more than $500 expenses there is a more detailed method that requires a special form you have to get completed and signed by your employer.
There is also a change to the Climate Action Incentive or what some people think of as the gas tax rebate.
“That’s been around for a few years,” said Oeschlagel. “When you claimed it, it was on your tax return and when you claimed it, it increased your refund or reduced your balance owing. Starting this year it will not be on the tax return, it’s going to start being paid quarterly…starting this July.”
If you’re feeling daunted, you’re not alone and there are professionals like Oeschlagel that are here to help.
“For simple returns, you can probably do them yourself,” said Oeschlagel. “But if there’s anything beyond the ordinary — for us a lot of our clients have their own small businesses or rental properties or investment portfolios, or other more complicated
things going on — then you’ll want to use a professional.”
Oeschlagel says BDO gives new and existing clients a checklist of forms and receipts to include so they don’t miss anything. He says when it comes to medical expenses, they tell their clients to include receipts even if they are not sure they qualify for a credit.
“Particularly in our neck of the woods, if you have to drive a long way to see a specialist, if you have to go to London a lot or Toronto or wherever, you really should be keeping track of all that mileage,” Oeschlagel advised.
If you do decide to tackle your return yourself or forget to give a form to your accountant, don’t panic.
“If you’ve made an honest mistake, these things happen, everybody is human,” he said. “You simply need to file what’s called a T1 Adjustment Request…that can be done online.”
