Tax season is finally here, and though there are some exceptional circumstances this year, as of the writing of this article, one thing has stayed the same: your taxes are due at the end of April. That means by April 30th, 2021, your 2020 taxes must be filed.
Before we go any further, it’s worth noting that we’re assuming people wondering about filing taxes in 2021 are looking to file their 2020 taxes – you wouldn’t start filing your 2021 taxes until next year, after all, and we’re way too far ahead to even start considering that!
Back to the question at hand – you can start filing your taxes February 22nd, 2021. That’s when the CRA starts taking electronic tax submissions. This is, of course, if you’re filing your income taxes – things are totally different for businesses, who file their taxes 6 months after the end of their fiscal year. We have a whole other piece on fiscal years you can check out.
When should I start doing my taxes?
This is a different, but intimately related question. You should start doing your taxes as soon as possible. The moment your first tax document comes in. It might be a T4, a T5, a T2202 – whatever it is, get started the moment it hits your inbox or mailbox.
Why? Because life happens, and fortune favours the prepared. Whether you need to get in touch with an accountant, or you’re doing everything with free, online software, the sooner you get started the better.
Tax preparation for 2021 will almost certainly be more complex for some than it was in previous years. That’s because the CERB is taxable, but it wasn’t taxed at the source. Unlike your employment income, you’ll have to pay taxes on the CERB when you file your income tax – we hope you’ve been putting a part of your CERB money away in order to pay those taxes.
Many Canadians have also had to work from home as a result of the pandemic. There are work from home-related tax benefits you might be able to apply for, including a simplified work from home tax benefit. Understanding and applying for benefits that are new takes time, and the more of a head start you get, the better.
Preparing your taxes in advance can also give you time to get your finances in order if you owe money. That also gives you (and, if applicable, your accountant) time to correct any errors and carefully review tax documents before sending them off.
So, while taxes can be filed starting February 22nd, we recommend doing your taxes as soon as possible, and reviewing them carefully before sending them in. You don’t want to miss out on any potential benefits, contact Compass Accounting today and let us help you prepare your taxes!