Islanders filing taxes early to get ahead of COVID-19 expenses, accountants say
CERB, EI, at home expenses, are all on the mind of Islanders
A lot more Islanders are filing their tax returns earlier than usual this year, according to some accountants in P.E.I.
"There seems to be a push amongst more people. Perhaps it's a little bit of the snowbirds not being away at this time of year," said Regan Lewis, owner of Signature Accounting and Tax in Charlottetown.
"It's kind of a mix of seniors, students and regular business people."
Those who lost their job and had to file for programs such as the Canada emergency response benefit (CERB) or employment insurance during the pandemic should be gathering some documents to complete their returns, Lewis said.
"Those will come out on T4A slips if you received the money through Canada Revenue Agency. They will come on a T4E if you received it from Service Canada on an unemployment type benefit."
Lewis said they aren't complicated forms to deal with and people don't need to wait for them in the mail. They can be accessed through your online CRA account if you have one — but he knows some people are worried they may have to pay in this year.
"I think the anxiety is there, but I think there is also an eagerness to rip the Band-Aid off if you will and find out 'OK what is the issue, and is there going to be an amount owing,'" he said.
On top of worrying about how CERB and EI will factor into a tax return, people should also be looking into expenses they can claim from working at home, said Jennifer Dunn, tax partner with BDO Canada in Charlottetown.
"If you had to work from home during 2020 which a lot of us did, there is the whole working from home expense deduction you can claim," Dunn said. "The CRA has come out with what's called a temporary flat rate method, really easy, you can claim $2 a day for a maximum of 200 days."
Dunn said an alternative to that is a detailed method for things such as out of pocket costs for office supplies.
"Things like heat, electricity, water and sewer," she said. "With that method you would have to look at the square footage that you are using of your home or your apartment for work purposes and there's a little bit of number crunching to do."
Even if people are worried they have to pay taxes this year, Dunn said, it is good to get ahead of the problem.
"Make sure you file on time, because if you don't file on time and you have a balance owing you will be assessed a late filing penalty," she said, adding the deadline to pay any taxes owing has been extended to April 2022.
However, unlike last year the deadline to file your return won't be extended beyond April 30.
Free option for some
Both Signature Accounting and BDO are still offering in-person tax return appointments following pandemic health guidelines such as mask wearing and hand sanitizing — but both also offer drop-off and virtual options.
Low income Islanders may also be worried about paying to get their taxes done — but there is a free option for some.
The Community Volunteer Income Tax Program is a collaboration between volunteers in the community, organizations and the CRA for "simple tax returns," said Dawn Kennedy spokesperson for the CRA.
She said those who had to draw EI or from the CERB program would fit that simple tax return criteria.
"It's considered a regular income slip, it's not complicated. It's no different than if somebody had received a regular T4," she said. "Really the only requirement is that for an individual their income has to be around $35,000 or less. So adding those extra COVID slips is not making it too hard for the volunteers."
The program also offers a virtual option as well as drop-off locations at Murphy's Community Centre, the St. Eleanor's Lion's Club and all public libraries across the province, Kennedy said.
"There is still some in-person service, we do have to respect guidelines for public health. The walk-in clinics are all by appointment."
Tax clinics offering services through the program can be found using a search through the CRA website, Kennedy said.