To say that 2020 forced all of us to do things differently is an understatement. That included the federal government, which created several new programs to help Canadians cope with the financial costs of the pandemic. The measures included financial assistance, new benefits and a host of new tax deductions.
Even if your income was unaffected by the pandemic, there’s a good chance that your family and staff members may be eligible for new benefits and credits. So it’s worth a look at what’s new for the 2020 tax year. Here are a few highlights affecting professional and personal tax returns this year. For a complete list of changes to taxes and benefits, visit the Canada Revenue Agency (CRA) website.
Normal deadlines are back in place
|How are you filing?||Filing deadline||Payment deadline|
|Individual||April 30, 2021||April 30, 2021|
|Self-employed and your spouse or common law partner||June 15, 2021||April 30, 2021|
Six months after the end of the corporation’s tax year
Generally, corporations have to pay their taxes in instalments, either monthly or quarterly.
Home office expenses
The CRA has made it very easy to claim up to $400 for expenses you incurred while working for your employer from home. The process requires little time and no supporting documentation from employers. Anyone who meets the eligibility criteria can claim $2 a day, up to $400 for the year. If you want to claim the actual amounts you paid, you’ll need supporting documents, and you must have a completed and signed Form T2200S / Form T2200 from your employer. You can compare the two options and decide which is the best use of your time and effort here.
Your firm may qualify for the Canada Emergency Wage Subsidy (CEWS)
Canadian employers who saw a drop in revenue during the Covid-19 pandemic, may be eligible for a subsidy to cover part of their employee wages, retroactive to March 15, 2020. You can use the subsidy to rehire workers and help prevent further job losses. You can learn more about eligibility here.
Additional support for you and your family members
You, or members of your family, may be eligible for some of the new benefits created in response to the pandemic. Share these links with anyone you think may be eligible for assistance.
|Canada Recovery Benefit (CRB)||Canada Recovery Caregiving Benefit (CRCB)
||Canada Recovery Sickness Benefit (CRSB)|
|Who can apply?||Employed and self-employed individuals who are affected by the Covid-19 pandemic and don’t qualify for Employment Insurance (EI) benefits.||
Individuals unable to work during the pandemic because they must look after a child or family member who needs supervised care.
|Employed or self-employed individuals who are sick or need to self-isolate due to the Covid-19 pandemic.|
Your 2020 tax year checklist
Whether you’re a do-it-yourself filer or you work with a team of experts that includes your Lawyers Financial Advisor, the key to minimizing taxes is gathering the information you need and leaving no stone unturned.1
Beyond the basic information, here are a few things you’ll need to locate.
☐ Last year’s tax return and CRA Notice of Assessment for you, your spouse or common law partner, and any dependents.
☐ Records of any tax instalments you paid throughout the year.
☐ A list of assets held outside of Canada.
TIP: You can access your CRA NOA online by creating a MyCRA account and using the mobile app to view your documents.
About you and your family
Families can tap into a lot of tax credits and claim a large number of legitimate expenses. Be sure to account for everyone and everything.
☐ Tuition slips (T2202A) for yourself or for a child
☐ Childcare expense receipts
☐ Charitable donation receipts (from you as an individual)
☐ Political contribution receipts
☐ Medical receipts
If your investments are consolidated with one investment firm or advisor, you should receive all of this information automatically. Ask your advisor if this information is available through an online portal or mailbox.
☐ RRSP contribution receipts
☐ TFSA contribution amount (available through MyCRA)
☐ Investment income tax slips (T5)
☐ Income from trusts (T3)
☐ Income from partnerships (T5013)
☐ Capital gains and losses summary (T5008 or Statement of Securities Transactions)
☐ Receipts for investment advice
☐ Receipts for interest paid on investment loans
The money you make
Depending on your age and your role in the firm, you may be receiving income from a number of sources. Give yourself enough time to track down details of every source.
☐ Employment income (T4)
☐ Employee profit sharing (T4PS)
☐ Employment Insurance slip (T4E)
☐ Pension, retirement and annuities income slips (T4A)
☐ Registered plan income (T4RSP & T4RIF)
☐ Dividends from your incorporated practice
☐ Old Age Security (T4A-OAS)
☐ Canada Pension Plan slips (T4A [P])
Considerations for all lawyers
As a Lawyer, you may be entitled to the following deductions related to personal and professional expenses. If in doubt, consult a tax expert or ask your firm’s payroll provider for advice.
☐ Professional and union dues
☐ Moving expenses if you relocated for work in 2020
☐ Home office expenses (including a portion of heat, hydro, property tax, and so on). Be sure to check out changes to home expense benefits due to Covid-19 (Note: signed Form T2200S / Form T2200 is needed if you are claiming actual work-from-home expenses.)
☐ Mileage (tracked in a log book)
☐ Out-of-pocket office essentials (computer, printer, supplies, etc.)
Updates on changes to the CRA's programs, filing and payment deadlines, and Covid-19-related benefits can be found here.
1 For information purposes only. Rules may change. Tax-filers are responsible for determining the information required for filing their tax return.