Focused Tax Strategies

CRA Changes for 2020 The CRA has made some changes for 2020, in light of the special circumstances during the COVID 19 pandemic COVID-19 federal and provincial benefits These appear on a T4A slip in boxes 197 to 204 and are reported on line 13000 as taxable income.... The Canada Recovery Benefit (T4A box 202) is subject to a social benefits repayment (line 23500) when net income exceeds $38,000 Home Office Expenses As announced by CRA recently, employees who had to work from home may be eligible to claim home office expenses using Form T777S, either the simplified method or a detailed method which will require them to obtain Form T2200S from their employer. Please see our article on this topic at Employee Home Office Expense Claim Focused Tax Strategies Ltd Digital news subscription expenses This is a new non-refundable amount where up to $500 can be claimed for subscriptions to digital news services with qualified Canadian journalism organizations. This can be claimed at line 31350 by entering the details of the subscription payments on the Credits worksheet. Canada training credit Schedule 11 now includes a section for establishing the claim of this credit which is then claimed on line 45350. This new section interacts with the 2020 Canada training credit and 2021 limit worksheet

New Simplified Home Office Deduction The CRA has issued a new policy in recognition of the special circumstances of the COVID-19 pandemic. Employees working from home over 50% of their work day(s) now have the option of claiming a flat rate of $2 per day worked or providing a detailed breakdown of various qualified expenses directly related to their work. The details can be found in our article https://bit.ly/386k8cL... In our opinion, the CRA has not gone far enough. It is insufficient to be able to claim $400 per year in the Flat Rate Method, which represents tax savings of only $100 for most taxpayers (assuming a 25% tax rate) The problem is that the CRA has not yet recognized the effective cost of working from home. It seems ridiculous to allow rent, but not mortgage interest or property taxes. Only being able to claim part of your communication expenses is unfair, especially when the cost of mobile phone plans, and the internet is rising as we speak. It is silly to allow long distance charges only, given that most people have phone packages including long distance. Not being able to claim the cost of computers, webcams, smart phones and furniture used via capital cost allowances is not appropriate because these types of office equipment are essential to working from home.

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