It can be an anxiety-ridden season for some as many people prepare to file their return by themselves.
“Or, you could have a professional do the work, take the stress out of the task, and ensure the return is filed properly using the most recent and best tax-saving information”, says Cher Wood, a tax specialist at Richmond-headquartered Reid Hurst Nagy Inc.
It’s good advice, since this tax year can be a bit more challenging than most — added information may be required if you’ve participated in one of the many COVID-19 subsidy programs offered by the federal and provincial governments.
“Because the COVID-19 subsidy payments have happened throughout the year for taxpayers who were eligible for them, additional tax slips will need to be included on personal returns,” Wood says.
They include the Canada Emergency Response Benefit, Canada Emergency Student Benefit (plus one that covered students with disabilities, children or other dependents), and a provincial COVID-19 Financial Assistance Payment, Canada Recovery Benefit, Canada Recovery Sickness Benefit, and Canada Recovery Care Benefit.
“These were all subsidies that have to be reported as income,” Wood says. “Most people won’t be used to getting these slips.”
Further, some of those who received these subsidies in addition to their other reported income could be in the unusual position of actually owing tax this year.
Under current Canada Revenue Agency guidelines, those earning income in excess of $13,229 are subject to pay tax.
“Anything in excess of that level does attract tax, unless you have sufficient other tax credits,” says Wood, adding there are a host of resources on the Reid Hurst Nagy Inc. website, including a checklist to help ensure you have all of the required documents to file your return.
One tip is if you have a lengthy list of prescription receipts put them in date order when you send them to a tax preparer.
Better still, many pharmacies can produce a printout summary of your prescription costs arranged on a single document for the entire year.
“That’s handy, especially if you have a lot of prescriptions.”
The benefit is that the more organized and complete your information is, the less time it takes a tax preparer to put your return together, Wood says, adding it helps to keep your tax preparation costs within budget.
Usually, Reid Hurst Nagy Inc. works on a three-day turnaround to have your return complete once all information has been provided to them.
The deadline to file your income tax return is April 30; however, self-employed taxpayers (and their spouse or partner) have until June 15.
So far, CRA has not announced if there will be any extensions due to the continuation of the COVID-19 pandemic.
For more information on how you can get help with your return, visit rhncpa.com.