Do You Have Everything to File Your Taxes?

The list of required documents to file your tax return seems to get longer and longer each year.

Good morning (afternoon?) everyone!

It used to be “a day late and a dollar short”, but I think that comment should be adjusted for inflation. In all likelihood, this newsletter is hitting inboxes a little later than normal, so I’m “a few hours late and a few dollars short" — if you know what I mean.

It’s that time of year again! Tax season. Given the fact the 2020 tax season didn’t officially end until September 30, 2020, it genuinely feels like this entire 12-month period has been a “tax season”. Nevertheless, I’m hoping to answer a few standard questions over the next few weeks regarding filing personal income tax.

This week: What do I all need to file my income tax?

Your Tax-Filing Checklist

It’s impossible to be exhaustive and complete in a tax-filing checklist, given the depth of the Income Tax Act. So I’ll stick to the standards here. Here's a list of the documentation you'll need to file your taxes, whether you're filing yourself or having a professional file for you.

Personal Data

This is the standard stuff, but it’s very important for a variety of reasons.

  • Official name: Use your official, birth-certificate-approved name. Your tax return follows you throughout your life and into death, so it's best to use the most consistent and official name you have to ensure CRA is always dealing with the right person.

  • SIN: It's pretty difficult to file a tax return without a Social Insurance Number, so this one is a given.

  • Address: Use your mailing address and physical address. There’s a chance you receive mail in one jurisdiction and live in another. Why does it matter? Because Albertans pay a lot less personal tax than Manitobans and your tax brackets are determined by where you live.

  • Date of Birth: Very important for determining when you pay into CPP, when you can take out CPP, and for a variety of other senior-only tax credits.

  • Marital Status:It is fundamental you file your tax return jointly with your spouse. The CRA considers you to be in a common-law relationship (the same as a married relationship for tax purposes) if you have lived with your significant other for more than 12 consecutive months or if you have a child together. Filing jointly has a number of implications and it is imperative you file jointly if you are in a relationship as described above.

  • Names and SIN of Dependents: Important for transferring tuition tax credits, claiming childcare expenses, and ensuring eligibility for the CESG in the RESP programs. Also important for ensuring medical expenses are appropriately claimed and your Canada Child Benefit is appropriately calculated for the upcoming tax year.

  • Other Information: There is a long checklist on every tax return for a variety of information, such as:

  • If you’re eligible for the disability tax credit.

  • If you own specific foreign property of more than $100,000 CAD — if you do, you’ll be required to file an additional T1135 slip.

  • If you’re a Canadian citizen or when you entered Canada if you are a permanent resident.

  • If you sold your home and are claiming the Principal Residence Exemption.

T-Slips

These are, quite literally, all your “T” slips:

Income Statements from Other Sources of Income

Are you self-employed? You’ll need to fill out a T2125 — Statement of Business or Professional Activities form, which includes all your incomes and expenses. This is an in-depth tax schedule and requires its own post, but you’ll need:

  • Revenues

  • Expenses

  • Motor vehicle expenses and a mileage log

  • Copies of your motor vehicle purchase agreement/lease agreement

  • Home office expenses pro-rated to the area used exclusively for business inside your home. This includes property tax, insurance, mortgage interest, repairs and maintenance, utility bills, and rent.

  • Your capital asset list including all your equipment, tools, computers, vehicles, and other major business assets

Do you own rental properties? You’ll need to fill out a T776 — Statement of Real Estate Rentals for each individual property you own. You’ll need:

  • Revenues

  • Expenses

  • Motor vehicle expenses and a mileage log

  • Copies of your original purchase documents showing how much you paid for the property (best found on a Statement of Adjustments from your lawyer)

  • Copy of the property tax bill allocating land and building amounts

  • Prior year depreciation/CCA schedules used for prior year rental income

Do you run a farm? You’ll need to fill out a T2042 — Statement of Farming Activities. This is a massive, massive tax schedule. You should discuss the requirements with a professional accountant to ensure you’re receiving solid tax advice.

Tax Deduction and Credit Receipts

This list can become extensive, so I’ll do my best to check as many boxes as possible:

  • Medical receipts for all out-of-pocket medical expenses

  • Medical appointment cards with addresses to showcase the distance travelled for the medical appointment

  • Charitable donation receipts from registered Canadian charities and registered political organizations

  • Childcare expenses paid to a daycare or to an arm’s length individual caring for your children.

  • Union and professional dues receipts

  • Moving expenses if you’ve moved more than 40KM to start a new job or business

  • Spousal support payment receipts

  • Employment expenses (you’ll require a signed T2200 from your employer to be eligible for these expenses)

  • Digital news subscription receipts (though these are for authorized digital news organizations for 2020, so you’ll need to be aware of which organizations you’re subscribed to and ensure they are authorized)

  • Adoption expenses

  • Statement of Adjustments from a lawyer if you’ve bought or sold a piece of real estate in the year

  • Property tax bills for your personal residence (some provinces have odd property tax credits that may be claimed on your personal tax return)

  • T2201 — Disability Tax Credit Certificate (if you are eligible)

  • Interest payment receipts for eligible student loans (specifically the ones advanced by governmental organizations and not financial institutions)

  • Home accessibility expenses if you upgraded your home to be more accessible for someone who lives in the home with a disability

  • Teaching supply receipts purchased by schoolteachers

  • Statement of tax instalment payments made

That’s quite a long list and I’m probably only half done.

Data From Prior Years

The fundamental reason for requiring your past year’s tax return data is to ensure all your carried forward amounts and limits are appropriately applied to your current tax return. The following carry forward amounts are very important:

  • RRSP contribution limit

  • Required repayments under the Home Buyers Plan

  • Federal and provincial tuition credit carry forward amounts

  • Allowable business investment losses from prior years

  • Non-capital and capital losses from prior years

  • Capital gains from prior years

  • Capital gains reserves from prior years

  • Lifetime Capital Gains Exemption limit utilized in past years

Wrap Up

Now that is quite the list. Of course, the entire list won’t be applicable to every person, but this should cover the majority of the scenarios we see roll through the office.

Technology advancements have allowed for better and better software for individuals to file their own tax returns, allowing folks to save money and avoid having to pay a professional. I'm one of those professionals and I genuinely recommend taking a look at personal tax software before asking for professional help.

That being said, in Canada especially, the Income Tax Act becomes more complicated, more complex, and increasingly specialized each year — there are special credits for special individuals that never make the news, and it'd be impossible to keep your finger on the pulse of all the individual credits you may be eligible for.

Plus, I'd be remiss not to mention the increasing importance of tax planning in regular lives. Structuring your affairs with at least some intent is likely to save you tens of thousands of dollars in the long run. Elements like pension income splitting, appropriate timing of RRSP withdrawals, and appropriate transfers of tuition credits are somewhat complex and may require some additional help to structure properly.


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Apologies for the late email this morning. I hope you and yours have a great weekend and a prosperous week ahead!

JG