Get Ready To Do Your Taxes
The 2021 tax filing season will soon be here!
The tax filing deadline for most Canadians (for the 2020 tax year) is on April 30, 2021. For those who are self-employed, or who have a spouse/partner who is self-employed, the deadline extends until June 15, 2021.
The year 2020 was a tumultuous year given the coronavirus pandemic that ravaged the world. This resulted in economic challenges that pushed the Canada Revenue Agency (CRA) to move the tax filing deadline for individuals from April 30th to June 1st. Canadians were also given a penalty-free extension until September 30, 2020, to pay taxes owed. As far as we know right now, you should plan to file your return and pay outstanding taxes by April 30,2021.
IMPORTANT LOCATION UPDATE!
We have moved our SEEDS Kingston office to the lower level of the same building where we have been located for several years. Please see the map above for directions to the lower level. There is a large new sign too! We continue to have a secure, outdoor drop-box installed at the front of the office if you prefer to leave your materials there. Due to COVID restrictions currently in effect, the office will usually be locked. If you have an appointment, please knock and someone will let you in.
Personal Tax Checklist
PLEASE COMPLETE OUR PERSONAL INCOME TAX CHECKLIST found at seedscpa.com.
Once you have all your supporting documentation and receipts, please either scan and email, fax, mail or drop off your information to one of our offices. If you would like to send your information to us through our secure email provider, please let us know.
FYI some organizations are not obligated to issue their reporting slips until March 31, however, most reporting slips are online with Canada Revenue, so if you haven’t received yours yet, we may be able to obtain them for you.
The deadline for filing remains April 30, 2021. The sooner we have your information, the sooner you receive your refund!
NEW PROCESS for deducting employee home office expenses
The CRA has introduced a new, simplified option for deducting employee home office expenses during the COVID-19 pandemic.
Employees
Temporary simplified method
For 2020, eligible employees will be able to claim a personal income tax deduction for home office expenses at a flat rate of $2 per day worked at home in 2020 due to COVID-19, up to a maximum of $400. If multiple employees worked at a single household, each eligible employee is entitled to claim the flat rate deduction using the temporary simplified method.
Traditional method
Employees may instead choose to deduct home office expenses using the traditional method for 2020. To do so, the employee would be required to:
obtain a completed and signed form T2200, or new form T2200S, from their employer
determine the percentage of time that they worked from home and their eligibility for deducting home office expenses
The CRA announcement relaxes the qualifying criteria for 2020 under the traditional method. An employee who worked at home in 2020 due to the COVID-19 pandemic for at least 50% of the time during a consecutive four‑week period can be eligible.
The CRA has expanded the list of eligible expenses that it considers deductible and has updated its website to provide some helpful guidance on calculating the home office expense deduction using the traditional “detailed” method.
Deducting home office expenses
Whether using the simplified or the traditional method, all employees must complete and submit the simplified form T777S, Statement of Employment Expenses for Working at Home Due to COVID‑19 with their 2020 personal income tax return.
Employers
Form T2200
To ease the administrative burden on employers, the CRA has issued a simplified version – form T2200S, Declaration of Conditions of Employment for Working at Home Due to COVID-19, to be used for employees who are only able to claim expenses related to working from home (employees with other employment expenses must continue to use form T2200).
The CRA will also permit electronic signature of these forms, for 2020 only, to facilitate faster and remote certification of the forms by the employer.
The takeaway
The simplification of the process for deducting home office expenses, and the introduction of forms T2200S and T777S, is welcome news for both employees and employers!
SEEDS CPA can help you:
Determine the eligibility for employees’ deduction of home office expenses
Prepare form T2200 or new form T2200S for your employees
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