You've got questions?
The 2021 tax filing deadline is April 30th. Millions of people are in the process of filing their returns. What are they asking about? CloudTax CEO and Founder Nim Balachandran details what he's been hearing from CloudTax clients.
"I've received a notification from Canada Revenue telling me my CRA Account has been closed. Can I still file my return?"-Sharon, Halifax
The short answer is yes! But of course, with CRA, there often is a longer answer. If you have all your slips detailing income, et cetera, you can still file your return. But, if your information is stored only in your CRA account you will need to regain access. CRA is contacting taxpayers whose accounts have been affected, and encourage to call if you have not been able to reset your account.
"I received CERB last year while my employment slowed down. Now, for the first time, I owe money on my taxes. What happened?"- Kurdeep, Brampton
The federal government moved quickly last spring to provide relief for millions of Canadians under the Canada Emergency Response Benefit (CERB). As part of that rollout, the government did not withhold any taxes on the amount, so it is just added to your taxable income for the year. The good news? Your amount owing is not due until next year, assuming your taxable income in under 75 thousand dollars, and you file your 2020 taxes on time.
"I had 1500 dollars in medical expenses last year, but it doesn't seem the deduction is making much of a difference to my bottom line. What am I doing wrong"-Christian, Lethbridge
This is one of the most common questions we hear. The answer lies within the Canadian Tax system. Medical Expenses are considered a "non-refundable credit" In other words, it will reduce the amount of tax you have to pay, but any excess amount will not be refunded. Plus, the amount of the deduction is impacted by your total income. You can only deduct the medical expenses after subtracting 3 per cent of your total income. In your case, if your total income is above 50 thousand dollars: 3 per cent of that is 15 hundred dollars...your 15 hundred dollars ends up not making much of a difference.
"With so many changes this year, I completely missed out on claiming the work from home deduction. My taxes have already been filed---what can I do?" Sophia-Bayfield
You can file an adjustment. If you're already received your Notice of Assessment, you will need to fill out a tax adjustment form (That's a T1-ADJ) You should also fill out form T777S to calculate the deduction (2 dollars per day times the number of days you worked from home) The adjustment form will ask for the previous amount claimed (0 in your case) and the new amount claimed. Let's assume the maximum of $400. Send it away, and you're all done.
All tax software approved by CRA includes the tax adjustment form.