✔ The usual deadline of April 30 has been pushed forward, giving you more time to file and pay if you owe.
✔ There are many benefits you should look into, such as sales tax credits and child benefits.
✔ If you get a tax refund, try to pay off your most urgent debts with your return.
Tax time is here. If that usually sends shivers up your spine, take heart. This year is different. The federal government’s response to COVID-19 means you could be seeing some significant breaks.
The deadline to file your income taxes has been extended!
The government has pushed the tax filing deadline from April 30 to June 1. If you are self-employed, you have even longer, until June 15.
The payment date deadline for the 2019 tax year has been moved as well, from May 1 to Sept. 1.
Even though tax deadlines have been extended, the Canada Revenue Agency (CRA) is urging anyone who expects to receive benefits under the Goods and Services Tax Credit (GSTC) or the Canada Child Benefit (CCB) not to delay filing their return. This will ensure your entitlements for the 2020-21 benefit year are rightly determined.
If you're a last minute filer, use this year's extension wisely. If you file your income taxes late, the penalty is 5% of your balance owing and there can be an extra 1% of your balance owing for each month.
The CRA is also temporarily recognizing electronic signatures to help speed the process for forms that are normally required to be signed in person to authorize tax preparers to file tax returns.
Maximize Your Tax Deductions and Credits
Stay on track with the latest news on CRA plans for taxes, GST refunds and more programs that may impact you. Meanwhile, here’s a heads up on what’s coming that could help keep or even put money in your pockets:
The GST/HST credit is a tax-free quarterly payment that helps individuals and families with low and modest incomes. It offsets part of the GST or HST that you pay.
One-time supplementary GST/HST credit payments were issued beginning on April 9 in response to COVID-19. That’s good news because it is an increase to the usual amount. It could be new money in your pocket.
How much could you get? The maximum amounts for the 2019-20 benefit year increases from $443 to $886 if you’re single. If you’re married or living common law, from $580 to $1,160.
If you have kids, the increase is from $153 to $306 for each child under the age of 19, excluding the first eligible child of a single parent. The increase is from $290 to $580 for the first eligible child of a single parent.
You’ll get the payment automatically if you usually receive the GST/HST credit. You’ll get it in the mail. Or it will be deposited in your bank account if you’re enrolled for direct deposit.
Family Tax Benefits
The federal government is upping the maximum annual Canada Child Benefit (CCB). It will be increased by $300 per child in 2020. The overall amount will vary according to your family net income. Families can expect to see this extra income in May and the government says this will put almost $2-billion into the pockets of Canadian families.
Here is a handy federal government child and family benefits calculator so that you can see how much may be coming to you and what payments you may have to make.
Medical Expense Claims
The federal government has a long list of medical expenses that you may be able to claim on your taxes. This applies to medical expenses you may have paid in any 12-month period ending in 2019. You may be surprised at what’s listed as an eligible expense:
- Air conditioner? Yes – but only with a prescription showing it’s being used by a person with a severe chronic ailment, disease or disorder. It could be $1,000 or 50% of the amount paid for the air conditioner break, whichever is less.
- Air filter, cleaner or purifier? Yes – again, you need a prescription.
- If you used an ambulance service, there’s no prescription required. It’s an eligible expense and no certification in writing is needed.
Caregivers can claim credits too. If you support a spouse or common-law partner, or a dependent with a physical or mental impairment, you can claim the non-refundable Canada caregiver credit (CCC).
Benefits for Seniors
You can get a tax credit for your age. If at the end of the taxation year you are age 65 or older, this tax credit for 2020 amounts to $7,637 or $7,494 for 2019 for many seniors.
Expecting a tax refund?
If you’re getting some cash back, now is the time to be financially smart.
Pay Down Your Debt
The first thing you should consider is paying down your debt. That means loans, credit cards, mortgages, whatever is hanging over your head and draining your funds monthly. The less interest you pay, the more money you’re going to keep in your pocket in the long run. So, try to pay the debts that have the highest interest, first.
Put Your Refund into Savings: The economy and jobs are changing fast. No one can predict what work is going to look like past COVID-19. Now may be the time to try and upgrade your skills or get some new ones. The federal government is trying now to speed up skills training for people who are out of work.
We are here to help.
If you need support, remember that we are all in this together. We are here to help too, visit easyfinancial.com to learn more or call us at 1-888-502-3279 with questions.