Tax Season is Coming – Important Things to Know
It’s one of the most dreaded times of the year for many businesses – tax season. This year’s tax season for the 2020 tax year promises to be one of the most challenging years yet, partially thanks to the COVID-19 pandemic and the huge number of things businesses and individuals will have to consider when preparing to file.
However, tax season doesn’t have to be scary or intimidating. There are plenty of resources out there to help when preparing taxes for Canada tax season 2021. Here are some important things to know when filing taxes in this unprecedented year:
Important Dates to be Aware of
Due to the COVID-19 pandemic, Canada Revenue Agency provided relief in a number of ways to both businesses and individuals. This included everything from support payments to extensions on paying taxes. While this support was much-needed for many businesses, the sheer number of changes will surely lead to some confusion when it comes to filing taxes in 2021.
All of these dates do come with a caveat that we are in uncharted territory this tax season. Some dates may be subject to change or CRA may offer extensions for people or businesses unable to meet certain deadlines. When in doubt, it’s always important to check with the main CRA website for posted updates and bulletins.
For individuals and employees, many of the dates ahead in 2021 for the 2020 tax year are unchanged. RRSP contributions can still be made for the 2020 tax year within the first 60 days of 2021. April 30th currently stands as the final day to submit tax returns and pay any owed balance without penalty. Of course, this date was extended in 2020 and there are rumours that a similar accommodation may be made in 2021 but no confirmed plans as of writing.
Self-employed individuals have until June 15th to submit their completed tax return but balance owing is still due on April 30th to avoid interest charges.
For businesses, the final day to provide a T4, T4A, and T5 to employees is still February 28th and this is unlikely to change. One additional tax form businesses may be looking to complete this year is a T2200. This form allows individuals working from home to claim eligible home office expenses.
Business tax filings are due April 30th as well with some notable exceptions. Businesses that do not follow a standard calendar year for their taxes must file within 6 months of the completion of their fiscal year. Annual GST or HST filings are due by June 15th but this only applies to those not on quarterly or monthly filing schedules.
Get Help with Document Management and Secure Printing
With many people working from home, simply printing out a stack of tax slips to deliver to each employee’s desk may not be an option in 2021. Plus, HR and payroll may not be working from the same location which can make collaborating to meet important tax deadlines more difficult than year’s past.
Document management and secure printing can help take much of the headache out of this process. Secure digital storage can be set up for access to approved parties from anywhere. With these solutions, payroll and HR can easily monitor the progress of tax slips and then securely print for mailing when ready.
This also makes organizing business documents simple and efficient to save time and energy when it comes times to deliver that stack of tax season documents to the accountant. Instead of scrambling to pull together receipts, invoices, payroll documents, and more as the deadline draws near; everything is in one convenient place ready to be printed securely and dropped off.
Claiming Home Office Expenses
T2200’s were briefly mentioned above but these important tax forms will perhaps be one of the most commonly discussed tax documents of Canada tax season 2021. With so many employees working from home for much of 2020, many may be eligible to claim home office expenses on their tax filing. Luckily, from a business standpoint, a T2200 is a relatively simple form to complete.
The T2200 form can be found on the CRA website and is simply a declaration by a business that their employee was required to cover costs necessary for their employment for which they were not reimbursed. This can include internet, heating, electricity, and even a portion of property taxes.
Employees are responsible for keeping their own records relating to these costs and filing with CRA. The T2200 is just the confirmation from the employer that they were not reimbursed for these costs during the course of employment. For a complete list of eligible expenses, CRA has a complete and thorough document available online.
Navigating Taxes in 2021
There’s still a lot up in the air about taxes in 2021. Deadlines may be changed along the way and people may have more questions than ever. Regardless of the challenges you face, First Phase Data is here to support you along the way. For more information about how to prepare documents as tax season rapidly approaches, contact our document management experts today.