Things to Know Before Filing Your 2022 Taxes

If you are like most people, you dread tax time. Admittedly there are many reasons to dread it. It’s complex with all the rules and regulations that seem to shift or change annually. Maybe you don’t want to make a mistake that costs you money or find out you owe.

Money and taxes are tricky topics alone, and together they can create a feeling of dread if not managed properly with a plan. This time of year can be stressful if you owe money and have not set aside enough money to cover your tax bill.

It’s important to remember that resources are available to help, including tax professionals, software, and government resources like the Canada Revenue Agency (CRA).

Why We Pay Taxes

Dreaded or not, everyone needs to pay their taxes. Our taxes fund essential services such as healthcare, education, infrastructure, and social programs. By paying taxes, we are contributing to the well-being of our community and society.

Our taxes are also used to maintain public goods and services that benefit everyone, such as roads, bridges, parks, and public transportation. Our taxes are used to support economic growth and development through infrastructure, education, and innovation investments. By paying taxes, we are contributing to a strong and healthy economy.

To learn more about where your taxes go, visit the Government of Canada website.

What to Know Before You File Your Taxes

Every year tax regulation and deductions change. At times there are vast changes, while other changes can be minimal. So we made a short list of things you should know for your 2022 taxes. It’s important to be aware of the following:

Tax Deadlines

The deadline for filing your Canadian taxes is usually April 30. You have until May 1 this year, as April 30 falls on a Sunday, to file your taxes. Those with self-employment income have a later filing deadline of June 15 however if money is owed, the payment deadline is still May 1.

Important note: the CRA employees may go on strike this year. Because of this, experts across Canada advise submitting your tax returns early and online. It is best to get your taxes completed and submitted by April 7, before the completion of their strike vote. People should not expect a deadline extension, according to the CRA.

COVID-19 Benefit

If you received federal, provincial, or territorial government COVID-19 benefit payments, such as the Canada Recovery Benefit, Canada Recovery Caregiving Benefit, Canada Recovery Sickness Benefit or Canada Worker Lockdown Benefit, you will receive a T4A slip with instructions on how to report these amounts on your return.

If you repaid Covid benefits, the CRA has created the T1B Request to Deduct Federal COVID-19 Benefits Repayment in a Prior Year. If you repaid benefit amounts before January 1, 2023, you may choose when and how to claim the deduction on your tax return. You can claim your repayments as a deduction in the year you made the repayment or in the year you received the benefits. You may also split the deduction between years.

Housing Tax Credits

The first-time home buyer’s tax credit has increased to $10,000 for a qualifying home purchased after December 31, 2021. There is also an increase in the amount for the home accessibility tax credit to $20,000.

Labour Mobility Deduction for Tradespeople

This deduction provides an eligible tradesperson with a deduction for certain transportation, meals and temporary lodging costs incurred for travelling significant distances to earn income at a temporary work location from temporary employment in construction activities during the 2022 and subsequent taxation years.

Air Quality Improvement Tax Credit

If you were self-employed or a member of a partnership in 2022, you might be eligible to claim a refundable Air Quality Improvement tax credit. This credit equals 25% of your total ventilation expenses to improve ventilation or air quality at your business.

Immediate Expensing Deductions

New in 2021, the immediate expensing incentive allows eligible businesses to claim up to $1.5 million in depreciation expense on eligible properties. This is done through the Capital Cost Allowance (CCA) claim on the tax return. The deduction can be claimed for one eligible property or spread amongst several if the total claim does not exceed $1.5 million.

Disability Tax Credit

The disability tax credit (DTC) is a non-refundable tax credit that helps people with impairments, or their supporting family member, helping to reduce the amount of income tax they may have to pay.

Medical Expense Tax Credit

The list of eligible medical expenses has been expanded to include amounts paid to fertility clinics and donor banks in Canada to obtain donor sperm or ova to enable the conception of a child by the individual, the individual’s spouse or common-law partner, or a surrogate mother on behalf of the individual.

In addition, certain expenses incurred in Canada for a surrogate or donor are considered the individual’s medical expenses.

Reasons to use a professional to prepare your taxes

Although you can complete your taxes on your own, if you want to ensure you are getting all deductions and credits possible, it’s a good idea to consult with a tax professional. A qualified tax professional like us can ensure that you file your taxes correctly and take advantage of all available deductions and credits. There are also many other reasons to use a tax professional, including:

  • Expertise: Tax professionals are trained and knowledgeable in tax laws and regulations and can help ensure your taxes are filed accurately and efficiently. This also saves you the frustration and headache of learning a new online system to file taxes.
  • Savings: A tax professional can help you identify tax deductions and credits you may have overlooked, which can result in significant savings. Each year our team completes intensive training on tax changes and refresher on all other tax deductions and regulations to ensure we can create as much savings as possible for our clients.
  • Avoiding mistakes: Taxes are complex, and errors in your tax filing can result in an audit, penalties or fines. Our team reviews all returns for accuracy before submission so you can avoid time-consuming and costly mistakes.
  • Time savings: Preparing your taxes can be time-consuming and stressful, particularly if you have a complex financial situation. We handle the paperwork and number-crunching, saving you time and reducing stress.
  • Audit support: Trust us, we hate that word as much as you do. But if the CRA audits you, we will provide support and representation to help you navigate the process.

Overall, using a professional to prepare your taxes can provide many benefits not to mention peace of mind. Choosing a qualified and reputable tax professional is important to ensure you receive the best possible service.

Need help with your taxes? Our professionals are ready to help, book today.