3 Must-Know Tax Tips To Help You This Tax Season

The start of the new year could highlight two things: new resolutions and the approaching tax season.

We can make a pretty good guess which option you’d prefer to focus on. That’s why we came up with our three best tips for the approaching tax season that you should keep in mind.

Our top tax tips are:

1. Make good use of the COVID benefit repayment options.

The government set various assistance programs to help Canadians during the pandemic. You may have received an emergency benefit, such as the Canada Emergency Response Benefit (CERB), only to discover later that you were not eligible.

The good news is that the way you can claim your repayments has changed. Your federal COVID-19 support funds must now be repaid by January 1, 2023. You can also utilize your repayments to reduce the amount of tax you owe when you file your return.

Why would I have to repay a COVID-19 support benefit I received?

You might have to repay the COVID-19 support benefits you received if:

  • Your situation changed since you applied
  • You made a mistake while applying
  • You received more financial assistance than you were eligible for

If you are required to repay any COVID-19 support funds, you will get a letter from the CRA. If you received COVID-19 support benefits through the CRA, you’ll receive a T4A slip showing how much you repaid.

2. Find out how to claim your work-from-home expenses in the most efficient way possible.

If you, like many other Canadians, were required to work from home as a result of COVID-19, you may already know that you can deduct part of your home office expenses on your tax return.

There are two ways to calculate how much you can claim: the flat-rate method and the detailed method.

3. Check if you’re eligible for the Canada Workers Benefit

The Canada Workers Benefit (CWB) is a refundable tax credit for low-income individuals and families. It was previously known as the Working Income Tax Benefit (WITB). You could be able to claim the CWB on your 2021 return, even if you couldn’t on previous returns, thanks to some new rules.

A higher-income threshold for individuals and families

The income threshold has been raised, allowing more Canadians to benefit from this credit.This benefit is now available to people who earned up to $32,244 in 2021, an increase from the prior income limit of $24,573.The CWB is now available to families with a household income of up to $42,197. The prior year’s cap was $37,173.

The new secondary earner exemption

A new “secondary earner exemption” has been implemented, which means that the income received by your husband or common-law partner during the year may not affect your family’s CWB eligibility.

With the new “secondary earner exemption,” you can deduct up to $14,000 from your household income if your spouse or common-law partner passes the eligibility standards. This means that more families will be eligible for the credit in 2021.

If you need help on preparing this coming tax season, feel free to contact IDM Professional Corporation CPA 

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The IDM Team

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