Your taxes might look a little different this year because of the pandemic. With special government assistance like the Canada Emergency Response Benefit and new deductions for people who work from home, this tax season promises to be unique.
The Canada Revenue Agency says it is expecting a flood of queries related to COVID-19 benefits.
To help those with questions, personal finance expert Shannon Lee Simmons sat down virtually with CBC’s Jacqueline Hansen to discuss how taxes are different this year.
Here are those answers, edited for clarity and length.
Q: Tax season usually kicks off when you get that T4 form from employers. This year, there are different forms. Can you walk us through what other forms Canadians could be expecting?
A: If you got government support last year (whether through CERB, CRB, or CSB), that’s going to show up on a T4A. And the most important thing you can do for yourself is have a my CRA account. You can go to previous tax years; you can make sure you have all your tax slips and find all your T4 documents.
For home office workers — there’s also the T2200 form. The T4A for government support and the T2200 for home office expenses are the two new forms you should be watching out for.
We’re also used to seeing T4Es. Those are the Employment Insurance forms and used for parental leave as well. If you were an employee and you were laid off this year, Service Canada changed it so that across the board — everyone got $500 per week.
Q: A YouTube user asked: Are there any indications that the CRA will delay the return filing due dates (like they did last year) beyond April 30 for personal tax returns, and June 15 for corporations?
A: I didn’t see any indication of that. It’s really important to know: There’s a big difference between filing your taxes and paying any balances owing. The big deadline that everyone usually talks about is this April 30 filing deadline for personal taxes.
And it’s June 15 for people who are self-employed, which would be if you’re a sole proprietor. But I worry about people thinking that they have until June 15 to file their self-employment taxes because the money is still due April 30.
How can you know necessarily what you might owe by April 30 if you haven’t filed yet? Try to figure out what you owe and get it done by April 30. Because then you don’t get charged any interest — that’s my blanket advice.
Q: Who doesn’t have to pay right away? Who has a year to pay the taxes that they owe?
A: Very specifically: if you made $75,000 or less in 2020 and you were on one of the government programs (such as CRB, CSB, the caregiver allowance, or CERB), you have an amount outstanding. You have until April 30, 2022 to pay those taxes without the government charging you any interest.
If you made over $75,000, you don’t qualify for that extension.
Financial expert Shannon Lee Simmons recommends all Canadians get a my CRA account to make doing your taxes easier. The Canada Revenue Agency website is shown here. (Doug Ives/The Canadian Press)
A: The CRA shut down 800,000 Canadian accounts recently. So the best thing to do if that’s happening to you is just reset it. It’s going to be annoying. You’re going to have to get on the phone.
I’ve had some clients say that they waited three hours to get through, so put your phone on speaker and maybe watch a show or do some work. Eventually when they pick up, they’re going to need last year’s tax information. Hopefully you’ve got your Notice of Assessment handy but they do have a way of asking other security questions in case you don’t.
Note: The CRA also says users can log in using their banking information or have a new CRA registration mailed to them.
Q: Stephanie on YouTube asked: My T4 for CERB is on my CRA account but I haven’t got the physical copy in the mail yet. Can I use that electronic file in order to file my taxes?
A: 100 per cent. That’s what it’s there for.
Q: Margaret via Facebook asked: My boss laid me off last March and still has not supplied me with my T4. What do I do?
A: Legally, your employer has to file that T4 by Feb. 28 of this year. You may not have gotten a physical copy, but it may still be posted to your My CRA account. Check there first. It should be there, even if you haven’t gotten the physical copy, because sometimes employers will forget or they’ll be lazy or something will happen administratively for small businesses. That’s the easiest solution.
Number 2 would be to call your old employer, speak to the manager, speak to somebody and see if they have that information. Ask them: “What did they file to the CRA?” They should have filed it legally with the CRA already, so that is a bigger issue if they haven’t.
WATCH | Detailed or flat rate: Which filing method for working from home is for me?
Are you a renter or a homeowner? Tax expert Shannon Lee Simmons breaks down which method of filing for home-office expenses might make sense for you. 7:03
Q: Saba from Facebook asked: Can you write off a portion of property tax (when working from home) if you’re a homeowner?
A: No, not unless you’re an employee who earns commissions. The homeowner here really is not set up for the best bang for their buck as far as the “detailed method” (for calculating home-office expenses) goes.
For a lot of the clients I’ve seen, the flat rate tends to be easier, faster and worth more for a lot of people who are homeowners.
For the flat rate method, you just tally up how many days of your year that you were mandated to work from home (vacation days don’t count) and then make sure you do run that by your employer.
WATCH | Can you expense newly purchased home-office equipment?
Tax expert Shannon Lee Simmons answers a question about the single most disappointing piece of news she has for people setting up a home office. 1:31
You can write off up to 200 days for all of 2020. Make sure you’re agreeing on the days you worked from home with your employer and then you multiply that by $2 and that’s your deduction. So if you had the full 200 days, you multiply that by $2 to get a $400 deduction, done. No work, no effort, no receipts.
A lot of people are opting to do that, especially homeowners who work out their electricity, and their heat, and then once they take their time and square footage into account, it’s like well that’s only a $200 deduction.
Q: Danny on Facebook asked: Is there anything different about this tax season that students need to know in particular?
A: Number one, if you’re a student and if you were on the Canada Student Benefit, it is considered taxable income. Just like CERB, it’s going to be treated the same way and you’re going to get a T-slip. So that’s something to watch out for.
However, as a student, you probably have tuition credits that are going to completely offset that.
So make sure that you’re applying those tuition credits and putting them in properly. And don’t forget to add any carry-forward tuition from previous years. The more tuition credits you have, the less tax you’re paying.
Q: This is a different year for parents. Are there any potential tax surprises for parents as typically child care would have been a big cost?
A: It’s a big change this year for parents. If you have child care, the typical amount if you have a child under seven — you can deduct up to $8,000 per kid. So keep in mind that most people are going to spend between $15,000-$20,000 per kid. And then to be able to write off $8,000 as a deduction is huge for families. If you’ve got two kids that would be a $16,000 deduction to your household.
It works the same as an RRSP deduction. Imagine you made a $16,000 RRSP contribution, it would have the same positive impact on your taxes.
This year, what I’m noticing is people may not have spent the full $8,000 because maybe for six months they weren’t paying child care or day camps weren’t running. So all the things that used to qualify for that now don’t; they may no longer have the full deduction amount. So that might be a surprise. But you also spent less, so remember, you were saving some money.
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.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
