Like most things in 2020, income tax rules and programs have changed. Here are 3 important tips crafted from tax professionals we work with:
- Government Subsidies: CEBA funds are taxable and the government will be issuing a T4A tax reporting slip for 2020 showing the total amount of CERB you received. If your business participated in government relief programs, you should know that assistance received under the CEWS and CERS is taxable. The forgivable portion of your CEBA loan needs to be included in taxable income in the year the loan is received.
- Maximize your TFSA and RRSP contributions. Both are easy to contribute to and will help reduce or shelter income tax and investment gains.
- Home Office Expense. This year, a new temporary flat rate method will allow eligible employees to claim a deduction of $2 for each day they worked at home in that period, plus any other days they worked from home in 2020 due to COVID-19 up to a maximum of $400.
While the above is not an exhaustive list, your tax professional can provide specific details that are applicable to your unique situation. Need a referral? Contact your Mortgage Consultant – we’d be happy to give you the name of people we work with and trust.