Tax Tip Thursday

Are you self employed with a home office? If you had to buy a new shovel, put salt down (or hired someone to do these things for you), keep the receipts because a portion might be tax deductible!

Today, we are talking about a few of the changes to our taxes for this year.

Home Office Expenses for Employees

For the 2021 and 2022 tax years, employees working form home due to the COVID-19 pandemic will be able to claim up to a maximum of $500 using the temporary flat rate method to calculate their home office expenses. This means that they can claim $2 a day for any days that they were required to work from home during COVID.

Depending on the province and the holidays you have at your workplace, you could have between 248 and 252 working days in the year. To do this, you will NOT need a signed T2200 from your employer.

You can still use the detailed method and, in some cases, that will still be a bigger deduction, but it will depend on several factors. Our office can help you process this claim!

CPP

Now for some not so good news. A new year means a new hike to CPP premiums — the largest in THREE DECADES!

As of January 1, premiums for Canada Pension Plan will be hiked higher than usual. Employment Insurance premiums are also on the rise.

In the case of CPP, maximum contributions by employees and employers will be $3,499.80 in 2022, up from $3,166. For self-employed Canadians, the maximum amount will be $6,999, up from $6,332.

This is a brutal increase for everyone!

MyCRA and MyBusiness Accounts with the CRA

If you do not have one already, please get your MyCRA and MyBusiness accounts. I cannot tell you the number of times in a week that people contact us looking for information about their accounts that they could have accessed themselves! While we are happy to have people calling and love helping them out, we just cannot afford the time it takes to accommodate all the requests, So, we are now making it a requirement for our clients to get a number. You just need to follow these links: MyCRA and MyBusiness. It only takes a few minutes!

Mileage Deductions for Automobiles

If you use your car for your business and you use the deduction based on a percentage of mileage, then you should run out and check your mileage and put it in your calendar. This way you will have it for this time next year! It makes it much easier come tax season.

Incorporation — Is it For You?

Next week we are going to discuss Incorporation for small businesses. Is it a good idea? There are lots of reasons to do it, but also some reasons not to.

Disclaimer:

This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal or tax advice nor can it or should it be relied upon. All tax situations are specific to each individual. If you have specific tax questions you should book an appointment for a 1 on 1 consultation.