No More Sworn Testimony, But Audits Are Still Stress Inducing

“That” Phrase: it’s one no taxpayer wants to hear – digitally or otherwise. “You’re being audited.” If you’ve had to deliver that news you’ll know that the reaction can range from indignity to shock to panic. Based on the latest piece of legislation before Parliament, you might have to tell more of your clients to buckle up, it’s going to be a bumpy ride. CRA will now have greater powers. Consider this:

“My 69-year-old mother now lives with us, and we had to make renovations to our home so that she could be safe after her accident at her personal care home.   Can we write off the costs of those renovations?”  It’s not an uncommon question this year as Canadians coped with the stress of the pandemic. The Home Accessibility Tax Credit can provide some financial relief in these cases.

The Refundable Medical Expense Supplement is a tax credit claimed on line 45200 of the T1 return targeted at lower income earners.  If the credit exceeds the taxes payable, the balance will be refunded to the taxpayer. CRA provides an area on the Federal Worksheet that accompanies the income tax package to make the calculations. The trouble is, few people know about it.

Filing a tax return is always a good idea, but chances are CRA will owe you money even if you don’t have any income at all.  That’s because you may be eligible for some refundable tax credits. However, for the majority of people who have at least some income – and that includes teenagers who qualified for the CERB and other pandemic supports this year, it’s important to know the answer to this question:  who should file a tax return and who must file one? 

It’s not too late to learn to prepare personal income tax returns from your home or office and now you can confidently learn and practice doing 2020 tax returns with Knowledge Bureau’s newly released 2021 Professional Basic Tax Course. 

You may have heard the saying “the harder I work, the luckier I get.”  When it comes to tax, bookkeeping and financial advisory services,  it can also be said that the more education you have, the better the advice you’ll give to the benefit of your lucky clients.  For these reasons, we offer you twin “pots of educational gold” on this St. Patrick’s Day.    

Canada’s last Federal Budget occurred on March 19, 2019.  The 2021 budget has now been deferred again making it more than two years since our country had one.  Why is this important news?  Because Canadians need to make decisions about their financial futures, with the benefit of economic forecasting and certainty about tax law.  And there are many recommendations about needed change to talk about.