Doing taxes can be hard enough, but add in the fact that you’re a non-resident and there was a global pandemic last year and you have a whole host of new problems.
To help clear up tax confusion, liv.rent was joined by Taxback for a live liv.talk webinar that’s a renter’s how-to guide to getting a bigger tax return.
This webinar is perfect for non-residents who are filling their Canadian tax returns for 2020. Anyone who’s working or studying in Canada temporarily will want to hear all these tax tips.
At this informational webinar, you’ll get an overall look at how tax works in Canada for non-residents. Of course, everyone has a unique tax position and it’s ultimately your responsibility to comply with the rules, we can only help show you what those are. Keep up with the Canada Revenue Agency (CRA) to learn about their latest news and updates.
Meet our webinar leaders: liv.rent’s Marketing Specialist Melany Roa will be joined by Manus Shortall, VP of Business Development at Taxback.
Don’t know where to start with your taxes?
Learn how to file your taxes as a non-resident.
This article is a partial transcription from our liv.talk live webinar Renter’s Guide To Getting A Bigger Tax Return with Taxback . Watch the video and download the guide to get our insights now.
Table of Contents
Tax 101: basic tax principles for non-residents
When it comes to tax, you have to start with the basics. At our webinar we will be going over:
- An overview of the Canadian tax system
- Important tax dates for 2021
- What happens if you miss the tax deadline
- How to determine your tax residency
Canada’s tax system
In Canada, we have a progressive tax system. That means that the more money you are earning, the more taxes you’ll have to pay on it.
Not only is there federal tax to pay in Canada, but there will also be provincial tax, which is different depending on which province you are calling home.
In Canada, the federal tax-free allowance in 2021 is $13,808. That means you can earn up to that threshold before they start charging you tax on your income. Typically, you want to file your taxes every year, and there can be consequences for not doing so.
What generally happens is that most people, including non-residents, overpay tax each year. This results in a tax refund, and our webinar is going to show you how to make sure that the refund is as big as possible.
In our webinar, we will look at what it means when there’s an overpayment of:
- Income tax
- Canadian Pension Plan (CPP)
- Employment Insurance (EI)
What do you need to prepare your tax return?
Before you do your taxes, make sure that you have this information and all of these documents available:
- Social Insurance Number
- T4 document
- ID (Passport)
- Entry and exit dates
Important tax dates for 2021
Get out your calendar apps because there are some key dates you have to know for “Tax Season.”
The Canadian tax year follows the calendar year. It goes from the first of January to the 31st of December and taxes are always filed at the beginning of the following tax year.
The earliest you can file your returns would be on February 22 this year when the tax office officially opens its doors.
Here are some more key dates to note in Canadian tax season:
- February 28 — Deadline for receiving your T4 document from your employer
- April 30 —Tax filing deadline
- June 15 — Self-employed tax filing deadline
- September 1 — Date by any amount owing to CRA must be paid
What happens if I don’t file my tax return?
It pays to file your taxes. You are legally obligated to file your tax return. If you don’t, it could affect your future immigration status.
Also, you could be subject to fines, penalties, and interest on the money that you owe to the CRA. Plus, they’ll charge you a 5% penalty and an extra 1% of your amount owing for each month you didn’t file.
How do you find out what your tax residency status is? And, what happens if you miss a tax deadline? Watch the video and download the guide to find out.
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Tax in the time of COVID-19
Of course, COVID-19 brought a variety of changes and challenges to our everyday lives. liv.rent has created a ton of COVID-19 resources for renters and landlords to navigate the rental landscape during a pandemic:
- Immigrating to Canada during the COVID-19 Pandemic
- Coronavirus (COVID-19) Canada – Resources for Landlords and Tenants
- Coronavirus (COVID-19) Canada – Update For Landlords and Tenants
- Coronavirus (COVID-19) Rent Relief Canada
- Coronavirus (COVID-19) Canada – Support For Landlords
Now, we’re about to find out what it means for our tax returns. In our webinar, we’re going to cover everything non-residents need to know about the effect of COVID-19 on their tax returns and even how they can get a bigger return out of it, including:
- Home office expenses
- Tax implications of CERB, CRB, and EI
1. Home office expenses
A unique tax implication of the COVID-19 pandemic is home office expenses. With many workers suddenly having to shift to remote working from home, not everyone was set up for it.
The home office expense is available to anyone who worked from home for at least half of the time over a consecutive period of four weeks or more because of the pandemic.
There are two processes: a simplified process and a traditional detailed process.
You can claim up to $2 per day up to a maximum of $400 to cover a range of expenses you had because you were stuck working at home.
Traditional detailed process
This can total more than $400 in tax relief, so it’s worth trying to get to make your return bigger. It is meant to cover different expenses like office furniture, supplies, and even bill payments.
However, you do need employer approval for this credit. You’ll need to have either a form T2200 or form T2200S completed and signed by your employer.
2. Tax implications for CERB/CRB
This is likely to be one of the most unique tax years of all time with COVID-19. There are new tax implications for pandemic-related financial programs such as:
- Canada Emergency Response Benefit (CERB)
- Canada Recovery Benefit (CRB)
- Employment Insurance (EI)
These payments are subject to regular income tax. If you received any of these benefits, then you’ll be paying tax on them.
The new COVID-19 related payments that were issued in 2020 are subject to regular income tax. It’s up to you to declare those payments as part of your income in 2020 on your tax return.
Did you receive EI, CERB, or the CRB? What does that mean for your tax return? Watch the video and download the guide to find out.
Tax hacks to get a bigger return
In our webinar, we’ll be looking at five key areas where you can help yourself to get a bigger return:
- T2202 Tuition & enrolment certificate
- Medical expenses
- TD1 Form
- Tax Forms T4 & T4A
1. T2202 Tuition & enrolment certificate
The T2202 form is the official income tax receipt issued by qualifying educational institutions. It’s for students to be able to claim tuition, education, and textbook tax credits. These forms are usually available for you to download from your school’s online portal.
To be eligible, you must have paid more than $100 in fees. Plus, you can claim both a federal and provincial tax credit for the tuition amount.
You’re allowed to claim up to $400 per month of enrolment if you’re a full-time student. Part-time students are allowed to claim up to $120 per month.
If you earned more than the basic personal amount, then you can claim the cost of expenses to reduce your overall tax liability.
Examples of these eligible expenses include:
- Medical, including visits to the doctor, prescriptions, and surgery
- Tuition fees (T2202)
- Union dues
- Work From Home expenses, including rent, supplies, travel, and professional fees
Of course, if you are going to claim some of these expenses to bring down your tax liability, then you have to be prepared. Keep documentation and receipts for each cost.
You can also claim medical expenses that you paid for yourself, your spouse, or your common-law partner. Medical expenses include:
- Doctor consultants
- Nurses’ fees
- Prescription drugs and medications
- Premiums paid to private health insurance
- Orthodontic work
Some important notes about medical expenses are that they should be reduced by 3% of your net monthly income (or $2,352, whichever is less.) Then, the tax credit is 15% of the amount remaining on the expense.
What is a TD1 form and how do I fill it out? What are the T4 & T4A forms for? Watch the video and download the guide to find out.
Founded in 1996, Taxback.com is part of the Taxback Group and has been filing taxes in Canada since 2011. They are a team of tax refund professionals who specialize in helping you claim all of your tax entitlements, guaranteeing you your maximum refund possible.
On average, the typical Candian tax refund for them is $998 so it’s worth it to try and claim what you’re owed.
You can register now and get a free tax refund estimation:
- Non-resident tax filing application
- Resident tax filing application
- Tax refund calculator
- Unsure of your residency status for tax purposes? Register for a call back from a Taxback.com agent now
Verified liv.rent users are eligible for an exclusive discount of $15 CAD off TaxBack’s tax filing services.
Not on liv.rent yet? Sign up now to get the full digital rental experience and access to our Taxback discount.
Once you complete the Taxback application form, the Taxback team will handle the paperwork and transfer your refund directly to your bank account — anywhere in the world.
Taxback provides personal & corporate tax solutions. We will help you claim tax refunds and file tax returns.