IT MIGHT BE A BIGGER DEAL THAN YOU THINK
- by Andrew Hawryluk
- March 24, 2022
Are you paying the least tax possible? Are you filing your taxes at all?
Taxes can really, really nag at you.
Not getting them done as expertly as possible, or not getting them done on time – those are the two big issues, both of which we can help you with.
If you haven’t yet filed your 2021 return, you still have time – a bit more than a month – before the May 2nd deadline (see below for details). Send us your notice of assessment in the meantime. If you have already filed, send us a copy of your return for review.
Why, from a wealth management point of view, should you send us that stuff? Because your notice of assessment and tax return are absolutely integral to your financial plan. We could very well have a look at them and find out you’re missing an opportunity to top up your RRSP before you retire. Or perhaps there’s an opportunity to minimize the Old Age Security clawback (if your income is above a certain threshold, it gets clawed back…but we might be able to reduce your income, and thus reduce the clawback).
Or there might be tax credits you didn’t know about (see below for a partial list of credits). As we like to say in our Manifesto, small details are a huge deal. Well, tax credits most certainly fall into that category. For example, did you happen to make a safety improvement to your home last year – grab bars in the shower, or something like that, to help you as you age? See the Seniors’ Home Safety Tax Credit below.
If we have reviewed your return in the past, we might also flag something you have missed – a donation you claimed in past years but overlooked this year, as an example.
BEHIND ON YOUR TAXES? WE WANT TO HELP.
There are people who are years behind on their taxes. If you are one of them, do not despair! We understand the feeling of stress you may be experiencing. But there is no need for this to keep you up at night. Call us, or email us, and we will help you get this fixed – and oh, how much better you will feel.
If you need accounting assistance, let us know – we can refer some outstanding professionals.
COVID-19 SUPPORT MEASURES
If you received any benefits relating to the government’s COVID-19 financial support measures, keep in mind that some of these benefits are taxable. When you’re estimating your total income from all sources for the year, be sure to include any taxable benefits you received, and consider setting aside funds, if necessary, to pay any potential taxes you may owe in May.
WORK FROM HOME?
Did you work more than 50% of the time from home for a period of at least four consecutive weeks due to COVID-19? If so, you may be eligible to claim a deduction of up to $500 for home office expenses in the 2021 tax year.
GET CREDIT WHERE CREDIT IS DUE
Here is a partial list of notable tax credits available to Ontarians. For a complete list, click here.
- The Ontario Jobs Training Tax Credit helps workers get training that may be needed for a career shift, re-training or to sharpen skills. The credit provides up to $2,000 in relief for 50 per cent of a person’s eligible expenses. To help more workers continue to upgrade their skills and transition back to the labour force, the government is extending this tax credit to the 2022 tax year.
- The Seniors’ Home Safety Tax Credit helps make seniors’ homes safer and more accessible so they can stay in their homes longer. The credit is worth 25 per cent of up to $10,000 in eligible expenses for a senior’s principal residence in Ontario. The government is also extending this tax credit to the 2022 tax year, to help seniors who may not have had a chance to use it in 2021.
- The Low-Income Workers Tax Credit, also known as Low-income Individuals and Families Tax Credit (LIFT), provides up to $850 each year in Ontario personal income tax relief to low-income workers, and can be used to reduce or eliminate an individual’s Ontario personal income tax, excluding the Ontario Health Premium.
- The Ontario Child Care Tax Credit (known as Ontario Childcare Access and Relief from Expenses Tax Credit [CARE]), puts more money in the pockets of families and provides the flexibility they need to choose the child care options that work best for them. The government is providing a 20 per cent top‐up to this tax credit for 2021, increasing support from $1,250 to $1,500, on average.
- The Ontario Seniors’ Public Transit Tax Credit is a refundable tax credit to help seniors with public transit costs.
- The Ontario Energy and Property Tax Credit is a refundable tax credit to help low to moderate income individuals and seniors with property taxes and sales tax on energy costs.
- The Northern Ontario Energy Credit is a refundable tax credit to help Northern Ontarians with higher home energy costs.
NEW FOR 2022: STAYCATION CREDIT!
In light of Covid, many people will choose to vacation in Ontario this year, and to them we say, good news – there’s a credit for that! Save your receipts for local travel in 2022, and claim the Ontario Staycation Tax Credit next tax season.
A CLOSING WORD
Make sure we’re in the loop on your taxes – by sending us your notice of assessment or completed tax return, or by letting us know that you are behind on your taxes. We can help you pay the least possible amount of tax, and ensure your financial plan and wealth management goals continue to stay firmly on track. It’s all about giving you greater peace of mind – and that, just like the details, really is a huge deal.
PS deadline details:
The deadline for most Canadians to file their 2021 income tax and benefit returns is April 30th, 2022. Because this date is a Saturday, your return will be considered filed on time if the CRA receives it, or it is postmarked on or before, May 2nd, 2022. Similarly, your payment will be considered made on time if it is received by the CRA or processed at a Canadian financial institution on or before May 2nd, 2022.