2020 Tax Season
WELCOME TO THE 2020 PERSONAL INCOME TAX SEASON
Over the last year, we’ve all come together to face the challenges created by COVID-19. We would like to take this opportunity to thank you – our valued clients - for your patience, flexibility and support while we implemented new technology and processes to respond to the new safe-working environment requirements.
And now, we turn our attention to a new tax season! We want to assure you that we remain committed to delivering quality tax and accounting services throughout this tax season. To assist with preparing your 2020 personal tax return, and to ensure that we make the process as painless as possible, we have put together some important information that we hope you will find helpful.
2020 tax changes
Tax brackets for 2020 - the five federal tax brackets have been indexed using a 1.9% inflation rate.
Basic personal amount - the Basic Personal Amount was increased to $13,229 in 2020 but the increase will be reduced, on a straight-line basis, for taxpayers with net incomes above $150,473 and will be completely eliminated if income exceeds $214,368.
COVID related benefits - both the CERB and CRB are taxable benefits that were available to residents of Canada who stopped working for reasons related to COVID-19. CERB benefits will be reported on a T4A slip while CRB benefits will be reported on a T4E slip. Taxpayers should remember that no income tax was deducted on CERB benefits which may create tax owing when the income tax return is filed. Similarly, only 10% tax was deducted on CRB benefits. CRA is also indicating that if a taxpayer has non-COVID subsidy income of greater than $38,000 in 2020, 50% of the CRB will be clawed back on the 2020 income tax return.
Canada Pension Plan contributions - the CPP contribution rate increased from 5.1% to 5.25% in 2020. If you are self-employed, the new maximum employee/employer contribution is up slightly to $5,796.
Home Buyers Plan changes - the RRSP withdrawal limit on the HPB plan was increased from $25,000 to $35,000. This means that a couple can withdraw up to $70,000 to be used in the purchase of a qualifying home.
Digital subscriptions - Starting January 1, 2020, if you paid for a digital subscription with a qualified Canadian journalism organization, you will be entitled to a non-refundable tax credit of 15% of your subscription cost. Make sure to check with your specific organization to ensure that they are "qualified".
Each year we require our clients to sign an engagement letter which outlines the terms under which we prepare your personal tax return. You will receive a personalized engagement letter to sign when your tax return is complete. However, you may download a generic engagement letter here to review prior to your taxes being prepared
Client tax organizers
In order to proceed with preparing your tax return(s), we will require that you complete and sign our client tax checklist/organizer and upload it to your client portal along with all relevant documentation as early as possible. The organizer is available in a fillable-format here (PDF version).
Please note that your full name and social insurance number must exactly match the information on file with the Canada Revenue Agency (CRA). If you are not sure what information CRA has, please check your 2019 Notice of Assessment.
New clients will need to contact our office to setup an initial Zoom consultation appointment. Additionally, you will be required to sign a form which authorizes us to act as your representative with CRA.
Returning clients, with no significant changes to their tax situations, do not require an appointment. Simply complete our client tax organizer and upload it along with your complete tax document/slips package to your client portal. If your situation has changed significantly, and you would like to schedule an appointment, please contact the office and we will be happy to schedule a Zoom meeting with our tax staff.
Please note that, while the tax appointment does not allow time for tax planning, we offer personal or small business tax consultations after the tax season. Our regular professional rates will apply to these types of consultations.
|March 1, 2021||Deadline to issue T4s, T4As, and T5s.|
|March 1,2021||Deadline to contribute to your own RRSP for the 2020 tax year|
|Personal income tax instalment due dates.|
|March 31, 2021||Deadline to file T3 Trust Returns and NR4s.|
|April 15, 2021||Deadline to send your complete tax package to our office to meet the April 30th filing due date. Please note that we will do our best to file all client tax returns by the CRA due date but returns received after April 15th will be processed in the order received.|
|April 30, 2021||Personal income tax filing due date for individuals who are not self-employed.|
|June 15, 2021||Personal income tax filing due date for self-employed individuals. Please note that any payment of taxes owing is still due on April 30th, 2021.|
|June 15, 2021||Deadline to file GST/HST returns for self-employed annual filers with a December 31st 2020 year-end.
For assistance with GST/HST and payroll remittance due dates, please contact us.
Electronically filing your return
We will electronically file all tax returns (except in limited circumstances) but cannot do so without signed consent indicating that you have reviewed and agreed to all the information in your return. We will also require payment of our fees before your return can be e-filed on your behalf.
CRA review requests - after your taxes are filed
Each tax year, CRA continues to increase the number of requests for backup documentation to support claims reported on personal income taxes. Should you be contacted by CRA to provide additional information after your taxes have been filed, and would like us to assist you in responding, our standard professional rate will apply.
Other services - available all year
Our services don't end at tax time! We are available all year for any of your professional advisory needs including:
- Personal and business tax planning
- Business consultation
- Corporate tax returns and Notice to Reader financial statements
- Part-time controller or virtual CFO services