This tax year is one of the more complicated ones on the books. Nearly a quarter of Canadians received CERB benefits between March and October 2020, which could complicate their tax situations, and many more experienced working from home, job losses and other life changes due to the COVID-19 pandemic.
If you’ve put off doing your 2020 tax return, it isn’t too late. Canadians still have time to file ahead of the April 30 deadline.
In partnership with Canadian tax-preparation software Tax, we look at five things you should know if you’re filing last-minute, including tips and tools that can help you file your return faster and easier.
- There’s a faster way to get your paperwork together
2020 was a complicated year for many Canadians. Even those who are comfortable doing their taxes may be a little unsure of what forms they need to get started on this year’s return.
Nik Hayward, a tax analyst programmer at Wealthsimple, says that people are sometimes cautious about their taxes and put them off because they want to feel prepared before they start.
“Maybe delaying it as long as possible allows them the highest chance of making sure they have all of their slips and documentation before they file,” Hayward says.
But many of the necessary tax documents can be found in your Canada Revenue Agency (CRA) account online. These include the notice of assessment, which will give you a summary of your assessment from last year and outline your refund or balance owing. It’s also handy because it includes your Registered Retirement Savings Plan (RRSP) deduction limit for that year.
The info is particularly useful for those who attended school in 2020. “On the notice of assessment, it will let you know if you have any unused tuition amounts from prior years. So you can enter that and claim your carry-forward credit,” Hayward says.
Canadians can also find tax slips for employment income, such as T4s, in their CRA accounts. Those who received CERB or other COVID-19-related benefits will have received either a T4A or a T4E, whether they applied through the CRA or Service Canada.
Before you hit print on your documents, you might be able to save time with tax software that can fill in your return for you. Wealthsimple Tax software, for example, has an auto-fill feature that allows Canadians to import their 2020 tax documents directly from their CRA accounts into the program.
“It saves you a lot of data entry. You can either sign in directly through your CRA login, or you can use one of the partners, such as bank site information, to log in. And that way it imports all of your data directly into Wealthsimple Tax,” says Caroline Corbeil, tax manager at Wealthsimple.
- It’s a big deal to miss the April 30 filing deadline
“It’s very important to file by the deadline, especially for people still receiving benefits,” Corbeil says. Many benefits, like the GST/HST credit and the Canada child benefit, are calculated based on last year’s tax return. Corbeil says that if you don’t file on time, those benefits may be paused until you submit your taxes.
If you think you owe money this year, filing after the deadline could mean late-filing facing penalties as well. But “you won’t have any late-filing penalties as long as you file on time,” Hayward says.
He adds that there’s another benefit to filing on time, especially for those who received at least one COVID-19-related emergency benefit like CERB or CRB in 2020.
Canadians who received emergency benefits and had less than $75,000 in taxable income may eligible for interest relief until April 2022. You can still qualify for interest relief if you file late, but you may also have to pay the late-filing penalty.
- It (probably) won’t take as long as you think to file taxes
Corbeil says that for the majority of Canadians, it takes less than an hour to complete their tax return. “I think people find it a chore to file their tax return. And so they just procrastinate until the deadline. I think that’s just human nature,” she says.
That’s where software can help. Corbeil points to Smart Search on Wealthsimple Tax as an example of a time-saving feature. It helps users to find forms, pages and topics quickly. So if you know you want to claim the work from home tax credit, you can easily find and add the form to your return.
- You don’t need to be a tax expert to do your own taxes
Between COVID-19 benefit programs, work from home credits, claims and deductions, there’s a lot of new tax information this year. But Canadians don’t need to spend hours studying to prepare their own returns. Tax software that is certified by both the CRA and Revenu Quebec has up-to-date information about income tax rules and can help guide you through your return, step by step, ensuring that you don’t miss credits.
If you do get stuck, software providers can help. Wealthsimple Tax, for example, has both an online help section for commonly asked questions and a support team of tax experts, available to answer last-minute questions email.
- You can change your taxes, even after you file
“I think maybe for some people, they’re cautious about tax-related things,” Hayward says. “They don’t want to make a mistake.”
But your return isn’t set in stone. If you do need to change it after you file, you can.
Corbeil says that the process of changing your tax return using Wealthsimple Tax is easy. You may just need to wait until your first submission has been processed by the CRA before you can submit an amended version.
“In a worst-case scenario, you’re better off filing before the deadline,” Hayward says. “And then if you find that a mistake was made or you’re missing a slip, add it after. It’s still important to file that original return before the deadline, if you can.”
No matter how complicated your tax return, Wealthsimple Tax offers pay-what-you-want tax software. To learn more or get started on your taxes, visit Wealthsimple Tax.