‘Tis the season … for taxes

I know. Tax season is daunting, especially if it’s your first time filing your claims.

Here is a basic list to help you conquer this oh-so-wonderful time of the year.

Getting started

Before you are ready to start ling taxes on your own, or looking for a tax advisor, there are a few things you will need:

• Slips (the most common are T3, T4, T5)
• T4A for students
• Receipts you may have collected over the year (These can vary but some examples are rent receipts and charitable donations)
• Last year’s notice of assessment (If applicable)
• Last year’s return (If applicable)

Most employers will send out the required slips you will need to le your taxes, however, you can access your slips on MY Account as well.

Your options

The Canadian Revenue Agency has linked on their website software options available to process your taxes online.

There are both paid and free options available helping out with those who may not be able to afford a tax advisor.

There are tax clinics for those who prefer to le their taxes in person. Filing by the paper is still an option but much more time consuming and not as common.

Deciding on doing it yourself?

Before making final decisions on whether or not you are hiring someone to do your taxes, you should consider the pros and cons.

Pros

• Saving money
• Gaining financial insight
• For some, it may help them have peace of mind

Cons

• Time-consuming
• Online assistance can be insufficient
• There is a higher risk of error

I claimed CERB/CESB/CRB, how will this affect me during tax season?

The government of Canada has stated on their website that all CERB, CESB and CRB have not been taxed, meaning the taxes will be owed when you file your 2020 taxes. The percentage of tax deducted depends on what tax bracket you fall under.

Here’s a scenario situation for a better understanding of how this will affect your taxes:

Sam made $30,000 (this was already taxed by the employer) before losing their job due to COVID-19. They claimed CERB for the full 24 weeks adding up to $12,000 collected from CERB. Sam’s total income amounts to $42,000. Since this is below $48,535, they will only be taxed 15 per cent of the $12,000. Sam owes $1,800 in taxes from CERB.

If you are a student you can use your student tax credit towards any outstanding balance with CRA. This credit is for any students above the age of 16 that are attending an accredited post-secondary school. You can claim textbook costs, moving expenses and tuition fees each year.

The credit is non-refundable and can only be used to pay off any outstanding balance with CRA. The credit can also be transferred to a family member or yourself for the following year.

As for the relatively new CRB, the government of Canada says that your income might affect the amount you owe. According to the government’s response benefit page, “you will have to reimburse $0.50 of the CRB for every dollar of net income you earned above $38,000 on your income tax return. You will not have to pay back more than your bene t amount for that year. This will be due at the same time as your income tax return for the year.”

You can always visit the taxes section on the government of Canada’s website to keep yourself updated on the latest information.

Good luck!