3 Tax Tips to Stay a Step Ahead for the 2020 Tax Season

January 18, 2021 , ,

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The new year is here, which means it’s time to start thinking about your personal taxes for 2020. Stay a step ahead by preparing documents required for the upcoming tax filing.

Here are the top things you need to consider:

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1. Northern Travel (Box 32)

If your T4 includes Box 32, you are entitled to claim travel on your return.  There are a couple of things to keep in mind when determining which trips to claim.  We will require the following for each trip:

  • Where did you go?
  • Who went on a trip within the family?
  • What were the dates you travelled? If this is something you are unsure of, you can look back on your calendar if you maintain one, review your credit card or bank statements to see when you incurred expenses in that location, or even refer to your social media if you happened to post about your travels.
  • Most expenses can be determined using CRA’s simplified method for mileage and meals but some expenses require backup including, flight costs if you flew instead of driving, hotel costs, etc.
  • Remember to save receipts to provide to CRA, if requested.

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2. Donations

If you made donations to a registered charity during the year, you can claim a donation tax credit on your tax return.  Some key things to remember are:

  • Keep all receipts for donations made to registered charities
    • If you are unsure if the organization you donated to is a registered charity, you can review the receipt or search for it online.
  • An eligible donation receipt must have:
    • Registered charity number
    • Receipt number
    • Issue date
    • Location issued
    • Name of charity
    • Eligible amount of gift
    • Name and website address of the Canada Revenue Agency
  • If donation receipts are missing any of these, they will not be accepted by the CRA.

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3. Climate Action Incentive Payments

On December 16, 2020, the Department of Finance Canada released news to inform Canadians that the Climate Action Incentive will be received by taxpayers when they file their 2020 return. Single adults in Alberta (or first adult in a couple) will receive $490.00, the second adult in a couple (or first child of a single parent) will receive $245, and each child under 18 (starting with the second child for single parents) will receive $123.00. The baseline amount for a family of four would be $981 in Alberta. Note that individuals living in small and rural communities will receive an additional 10%.

For more information, visit the Government of Canada’s website and read the News Release Source, the Climate Action Incentive Amounts, and the 10% Supplement Map Information pages.

Looking for More Information?

Stay tuned for more tax tips as we get closer to filing those 2020 personal tax returns. You can also contact our office directly to discuss your personal taxes in more detail.

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