Higher Volumes, Complexity Highlight Tax Season 2021

Evelyn Jacks

The latest key tax filing statistics for tax season 2021 - February 9 to May 25 – show more tax returns were filed than last year without the benefit of  tax filing deadline extensions. As tax season 2021 now closes in on the June 15 proprietorship deadline exhausted tax specialists and highly involved financial advisors, will need to continue the pace for five specific reasons:

1. Pandemic supports for individuals are winding down, with the Canada Recovery Benefit are set to be reduced from $500 a week to $300 a week on July 17, upon the passing of the 2021 Budget Implementation Bill. For many who are still out of work, it will be necessary to tap into other savings or even sell assets to survive.Tax and financial advisors can help by counselling on the most tax effect ways to do so.
2. For struggling business owners, help is urgently needed to compute complicated business subsidies; badly needed by some to stave off bankruptcy. These subsidies have been marked by constant change on short notice, the most recent with the April 19, 2019 federal budget. Now is the time to audit prior-filed claims and correct them if errors occurred.
3. All taxpayers who tap into pandemic supports face increased audit risk.With close to 500,000 additional returns filed this year, 90% of them electronically, CRA’s data mining capabilities have been made easier.Additional funding has also been secured in the last federal budget for collection activities. This means tax specialists must schedule time for this over the next several months.
4. June 15 is also the filing deadline for the 2^nd quarterly instalment payment for those who owed more than $3000 on their tax returns in the current year and either of the two immediately preceding years.Those who met that criteria for the first time this year may face a cash flow crunch come September when CRA produces instalment remittance billings.That will require consultation with investment specialists who can advisor on the most tax-efficient way to withdraw funds from investment accounts.
5. Finally, it appears that a large number of returns arestill outstanding.Here are the statistics for tax season 2021 for T1 filings up to May 25:

In comparing filing trends to the 2020 and 2019 tax seasons, well over 30 million returns were received.

Tax specialists perform an essential financial service.  But their time is limited.  With summer break around the corner, delinquent tax filers are well advised to get their tax records in front of their tax specialists well before June 15 or face the risk that the work simply won’t be done on time.  That can result in late filing penalties, so it’s very important to file on time.  The government has noted that those with incomes under $75,000 can defer interest payments for one year.

Bottom line:  qualified tax and bookkeeping specialists are in high demand.  For those looking for a new career path, consider taking summer school online with Knowledge Bureau by completing the DFA-Tax Services Specialist™ Program (personal tax), the DFA-Bookkeeping Services Specialist™ Program or the MFA™-Business Services Specialist (corporate tax).  It will position you well to meet the ongoing demand for qualified services in these industries.

Additional educational resources: Join us for the September 23 Virtual CE Summit which will cover Audit Defence: GST, Payroll and Financial Statement Compilation.