Tax season is upon us.
You are now eligible to file your 2022 income tax return and with several important deadlines this week, it’s time to start thinking about filing.
Tomorrow (Tuesday, February 28, 2023) is the deadline for employers to give or mail, employees their 2022 T4.
“The following day is the RRSP deadline,” said Josee Cabral, a senior tax specialist with H&R Block
“You have up until the 1st of March to contribute to your RRSP. The 1st 60 days of this year go on the previous year's income taxes, so it's basically a way for you to contribute to your RRSP and lower your amount owing or maximize your refund.”
18 percent of your 2022 income is your RRSP contribution limit for 2022, up to a maximum of $30,780.
Cabral stressed that it’s important to ensure you’re placing your savings in the right type of account to avoid tax repercussions.
“It's important to also make sure that you want to invest in RRSPs, because if you do take the money out of your RRSP plan, then you will pay income tax on that short term. If you want to save money, then the TFSA would be the best thing for you,” said Cabral.
The Government of Canada also included several new, or update tax credits/benefits this year including Air Quality Improvement Tax Credit, the Home Accessibility Tax Credit, and the Canada Dental benefit.
“That's for children under the age of 12 and it covers dental expenses up to $650. It’s for families who don't have private health insurance, and it can be up to $650 for a family combined [with an] income under $70,000,” added Cabral.
Additionally, the amount a first-time homebuyer can claim has doubled.
“The first-time home buyers' credit has doubled this year. It was initially $5000, nonrefundable credit. It's not cash money - it was about $626 before - but now it's doubled. The credit is $1000 and it's for qualifying homes purchased in 2022,” says Cabral.
Cabral added that it’s important for full and part-time students to file their income tax, as they are eligible to receive GST once they turn 19 years old. Additionally, full-time students who move to be closer to their school are eligible to claim moving expenses.
"If you move to go somewhere and study full time and you're at least 40 kilometres closer to where your school is, you can claim moving expenses on your income taxes. That would be the moving truck, accommodations, and meals for up to 15 days,” added Cabral.
For those that worked from home in 2022, due to the COVID-19 pandemic, the COVID expenses are still in play.
“If you work from home more than 50 per cent of the time, for at least four consecutive weeks, you can claim either $2.00 a day, for up to 250 days - which is a maximum $500.00 deduction, - or you can file the detailed version. That is based on the space that you use in your home. You can claim electricity, Internet, and phone and if you rent then a portion of your rent can be deducted. Unfortunately, if you own your home, you cannot claim interest or your mortgage,” says Cabral.
Taxes can be filed via the mail, online, or with a tax professional ahead of the Monday, May 1 tax deadline – since April 30 is a Sunday this year - but the deadline could be extended if the looming CRA strike materializes.
"We're definitely keeping an eye on it, but for us, it's like any other day. We're just here to file taxes and put money back in our client's pockets. If there is a strike and they decide to extend the tax deadline, then we're all for it,” added Cabral.