Heads up, Canadians: Due to the COVID-19 pandemic, this is going to be a tax season like no other.
If you collected COVID-19-related benefit payments last year, you might end up owing more money than in previous years. However, if you spent part of 2020 working from home, you could wind up with a bigger tax refund than usual.
Here’s what you need to know about filing your taxes this season, including important deadlines.
Has the deadline been extended?
Despite this being a more complex tax season, the Canada Revenue Agency (CRA) has not extended the tax filing deadline. The due date is still April 30 for most Canadians, and June 15 for self-employed people.
To avoid interest charges, Canadians need to pay any taxes owed by April 30. However, not everyone has to comply with that rule this year.
Those who had a total taxable income of $75,000 or less and received one or more of the COVID-19 benefits listed below don’t have to pay their taxes until April 30, 2022.
Eligible benefits:
Canada emergency response benefit (CERB).
Canada emergency student benefit (CESB).
Canada recovery benefit (CRB).
Canada recovery caregiving benefit (CRCB).
Canada recovery sickness benefit (CRSB).
Employment Insurance benefits.
Similar provincial emergency benefits.
Qualifying Canadians “will have that full year after the filing deadline of April 30th [2021]” to pay any tax debt without facing interest charges, said Francesco Sorbara, Parliamentary Secretary to the Minister of National Revenue.
Those who qualify for the payment deferral still need to file on time if they owe taxes — or they’ll face a late-filing penalty.
Will I owe taxes on my government benefits?
The benefits listed above are considered taxable income, so the federal government introduced the tax-payment deferral to help out the many Canadians who will have to pay taxes on their benefit payments.
“[Many] lost jobs and collected benefits, and they may have some amounts owing,” said Sorbara. “We’re giving some flexibility there.”
WATCH | CRA prepares for a complicated tax season:
From job losses to recovery benefits, this tax season is expected to be complicated and the Canada Revenue Agency is hiring 2,000 people to help field questions. 1:53
The government didn’t withhold any taxes on CERB and CESB benefit payments Canadians received in 2020.
It did withhold a 10 per cent tax for people who received CRB, CRCB and CRSB benefits, but tax expert Jamie Golombek said many of those individuals will still owe the government money, as most Canadians’ income is taxed at a much higher rate than 10 per cent.
“For many people, [10 per cent is] not going to be enough, particularly for those who had other sources of income throughout the year,” said Golombek, managing director of tax and estate planning at CIBC.
“You may actually find out for the first time ever in your life that you actually owe some taxes.”
Working from home? Claim your cash
Due to the pandemic, many Canadians worked from home for part of 2020, which means they may be eligible for a home office expenses tax deduction.
To qualify, you must have worked from home more than 50 per cent of the time for at least four consecutive weeks last year.
There are two options for Canadians claiming home office expenses. The first is the detailed method, which involves calculating what percentage of your household costs — such as hydro, rent and internet — can be applied to your home office space. Also, you’re required to save all relevant receipts.
If that sounds like too much work, don’t fret. To simplify the process for people who worked from home for the first time in 2020, the CRA has introduced a new, temporary flat rate method. It allows employees to claim a tax deduction of $2 for each day they worked from home, up to a maximum of $400.
“We’ve kept it simple. They can file it without filing any documentation, any forms,” said Sorbara.
Software designer Pat Suwalski is seen working from his desk at home in Nepean, Ont. (Pat Suwalski)
Software developer Pat Suwalski of Nepean, Ont., has been mainly working from home since April 2020. He filed his taxes on Wednesday using the flat rate method and said it took him just minutes to calculate his deduction.
“I’m a pretty honest guy, so I took a calendar and I started counting [work] days,” he said.
Suwalski counted 188 work-from-home days last year. Multiply that by $2 a day and he gets a tax deduction of $376.
“I’ll take it,” he said. “It’s great that they made [the process] simpler.”
Which method should you choose if you worked from home this year? Golombek said the flat rate method may be the best option if you’re a homeowner, because it’s easier and chances are you’ll come out ahead.
That’s because mortgage payments — typically a homeowner’s biggest monthly bill — can’t be claimed as a home office expense.
“Our experience is that homeowners, typically speaking, don’t have enough expenses … to beat the $2-a-day method,” Golombek said.
While homeowners can’t claim their mortgage payments, renters can claim a portion of their rent based on the size of their home office space compared to their entire home. As a result, Golombek says they may reap bigger rewards by choosing the detailed method.
“Depending on [what] percentage of their home they’re using, [renters] typically would probably come out ahead on the detailed method.”
Digital tax credit
Golombek also points out one of the new wrinkles this tax season, which is that the government is offering a tax credit to people who subscribed to digital news services in 2020.
Canadians can claim up to $500 for subscriptions to qualifying Canadian media, such as newspapers, magazines, websites and podcasts, that don’t have a broadcast licence and offer primarily original news content.
“I call it a bit of a fun new credit,” Golombek said.
The CRA told CBC News it will post a list of eligible subscriptions on its website in March and that it will only include organizations that wish to have the information publicly posted.
If you still have questions about your taxes, you can call the CRA tax information line at 1-800-959-8281. The agency said it has beefed up resources at its call centre, as it anticipates higher than normal call volumes this tax season.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
