It’s never too early in the year to prepare for your 2021 taxes.  Here is a premature checklist we created that include some important items to consider for your 2021 tax preparation.

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Childcare expenses:

· Childcare expenses include daycare centres, summer camps, overnight boarding schools, and caregivers such as nannies.

· Generally, childcare expenses must be deducted by the spouse with the lower income.

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Deduct student loan interest:

· Students studying at a post-secondary institution can deduct the interest charged on a designated student loan.

· Apply this deduction if you owe taxes, otherwise, it’s better to carry it forward.

· Interest can be carried forward and applied to any tax return for the next five years.

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Maximize your RRSP contribution:

· If you don’t currently contribute to an RRSP, it’s not too late to benefit from a significant tax deduction for the 2021 tax year.

· You have until March 1, 2022 to contribute.

· Your RRSP Contribution limit is 18% of your earned income from the last tax year, plus any unused amounts from previous years.

· Check out your latest notice of assessment or log into your CRA My Account to find out what your RRSP contribution limit is.

· You can even choose to transfer TFSA interest gains, which are tax-free, to bump up your RRSP contribution.

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Deduct property taxes (owners) or rental payments (tenants):

· Landlords can use Form T776 to claim property taxes for the period in which a rental property was available for rent.

· Some tenants can claim partial rent payments as a home office expense if they use their home for employment or business purposes.

Deduct employment expenses:

· You can deduct work expenses such as cell phone bills and office supplies if your employer asked you to purchase them.

· Eligible educators can also claim up to $1000 for eligible teaching supplies.

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Deduct moving expenses

· Claim moving expenses if you moved at least 40 kilometres closer to y our work, a new business, or for post-secondary schooling

· Qualifying expenses include storage costs, travel expenses, temporary living expenses, the cost of cancelling a lease, and more.

Click here for more information on moving expenses.

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Home Buyers’ Amount

· You can claim a $5,000 housing rebate if you purchased your first home and did not live in another home owned by you or your partner in the past four years.

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Apply for the GST/HST New Housing Rebate

· You may qualify for the GST/HST housing rebate if you did substantial renovations or purchased or built a new home.

· A similar provision exists for landlords under certain conditions.

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Deduct self-employed business expenses

· Small business owners can deduct advertising costs, bank fees, office supplies, and travel expenses.

· Those who work from home can claim a portion of their utilities, insurance, and maintenance costs.

· Deductible amounts are based on what portion of the residence is used for business purposes.

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Deduct home office expenses with the new temporary flat rate method

· If you worked from home during the pandemic, the CRA has implemented a new temporary flat rate method that makes it easier to claim deductions for home office expenses.

· You can claim $2 for each day you worked from home, up to a maximum of $400 (200 working days).

· Also avoids needing to calculate the size of your workspace, keep supporting documents, or submitting Form T2200.

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COVID-19 Emergency Payments

If you received:

· CERB, CESB, Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB), of the Canada Recovery Caregiving Benefit (CRCB) payments, enter on your return the total of the amounts you received.

· You will receive a T4A (for benefits issued by the CRA) and/or a T4E (for benefits issued by Service Canada) tax slip in the mail with the information you need for your return.

· These benefits are taxable and you may owe no tax, owe tax, or be entitled to a refund when filing your return depending on how much income you earned from all sources, and deductions and credits you are entitled to claim in 2021.

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