As the deadline for filing taxes — extended to June 1 this year due to the coronavirus pandemic — approaches, there are a few things to consider when filing.
At Liberty Tax in Peterborough, Ont., owner Tammy McCartney says the most frequently asked question this year is about Canada Emergency Response Benefit (CERB) payments and how they will affect taxes.
She says CERB payments are considered taxable income.
“We have been telling people to put about 20 to 30 per cent of that money aside depending on your tax bracket,” said McCartney. “Then when you file next year for 2020, then you’ll have to pay it.”
She says that next year, you might also be able to claim certain expenses if you’ve been required to work from home, depending on your employer.
“Your employer would have to fill out a form called the T2200, which is a statement of employment expenses,” she said. “Technically, if you had a separate office, you could calculate a percentage of heat, hydro, cellphone and internet, but keep all of your receipts and have that form signed by your employer.”
As far as payment goes this year, the grace period to pay money owing has also been extended. If you owe money on your 2019 taxes, you have until Sept. 1, 2020 to pay. But credit counsellor Nancy Jackson says it might not be the best idea to defer too many payments.
“Talk to your significant other, talk to a financial adviser about your options and, if you can, avoid deferring too many things because eventually, we will have to pay and we don’t want those bills to pile higher and higher,” Jackson said. “Figure out your bill priorities and go from there.”
Jackson says that at the Community Counselling Resource Centre, also in Peterborough, staff have been fielding a lot of questions about bill deferrals, especially when it comes to credit card payments.
She says to be sure to read the fine print in any agreement.
“Some creditors require you to call each month and some are agreeing to three months or six months, and you have to be very clear about that and also about interest payments,” she said. “Many are suspending payments but not suspending interest.”
Jackson said to keep track of any phone calls with lenders or creditors, including dates and times of calls. She also said to record any new due dates for bills so you don’t lose track down the line.
Back at Liberty Tax, McCartney says you have a number of options this year for filing your taxes.
“We’re offering drop-off service. In our office, we have our chairs spaced six feet apart, you can email us, we can get your information over the phone and we now have the ability to send your consent forms electronically,” she said.
While she says her business accepts walk-in clients, it is a good idea to call ahead and book a time if you want to avoid crowds and a wait.
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