LONDON, ONT. -- For many people filing taxes this year will be unlike any filing they’ve done before.
“It’s going to change the tax model for a lot of people, business owners and those who were employees but now have started to do something on the side,” says Patrick Briscoe, Certified Financial Planner with Bays Water Wealth in London, Ont.
Briscoe says many are dealing with various income sources throughout the year which may complicate things.
“If you’ve started to, say, drive for Uber part-time to make some extra income you’ve got to deal with self-employed income taxes. So, it’s going to be a big change for people.”
Then there are those who have received government benefits, like the Canadian Emergency Response Benefit (CERB).
The Canada Revenue Agency (CRA) says much of that money, if not all of it, is being taxed.
Briscoe believes most people understand this is going to happen, but the impacts may still hit hard.
“I think they’re understanding of it now. There was some clarification in the media and from the government on the fact that this is taxable income. Are they prepared for the tax balance, potentially? That, I’m a little less sure of.”
Briscoe says this year, probably more than any other, it’s important to get as much information as you can. Whether that’s doing your own research, reaching out the CRA, or contacting a professional.
One of the biggest changes will be what can be claimed as expenses by those who have been working from home.
You are eligible to make claims if you meet the following criteria:
- You worked from home in 2020 due to the pandemic or your employer required you to work from home
- You worked more than 50 per cent of the time from home for a period of at least four consecutive weeks in 2020
- Have a completed and signed Form T220S or Form T2200 from your employer
- The expenses are used directly in your work during the period
Briscoe says he’s seen a dramatic increase in people looking for financial planning help during tax time.
“I’ve had a lot of people say, ‘I’ve done it for myself for years, or a family member has done it for me, but this year there are just too many things going on, too many questions.’”
Tax filing software programs are up to date on income calculations including government programs and on claims that can be made such as people working from home.
More details on deadlines and the impact of COVID-19 are available on the CRA website.