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Money explained
Make tax time less taxing by getting organized now
Tax season is nearly here again. Here’s the paperwork you should collect to keep yourself on the CRA’s good side.
Danny Bradbury
4-minute read
Tax season is back again, like clockwork. Getting your slips and receipts straight can be a headache, so we’ve partnered with our friends at H&R Block Canada to bring you a simple checklist (PDF, 145 KB) Opens in a new window.. If you’re not sure where to start, read on.
The CRA asks for several slips to prove income and other benefits you’ve received throughout the year. Your employer will help you out by prepping most of these for you, including your T4 employment income, T4A pension and old-age security payment slips. Look for them before the end of February.
You might receive a T3 trust slip for any payments they give you, a T5 slip reporting interest and income from dividends and mutual funds, or a T5008 slip to report any income from securities transactions that you’ve sold. Keep them all — you’ll need them.
Don’t forget to file slips for any benefits you receive, too. A T5007 Statement of Benefits form covers workers’ compensation, social assistance payments or supplements from your province or territory.
If you’re studying, you can claim a tax credit for your tuition fees. Be sure to get your T2202A slip from your institution.
Be diligent when compiling receipts for work-related expenses you’ve paid, as these can help reduce your taxable income. This year might be a little different, but wherever you were working from, you might have claimable expenses. The CRA has made it easy for anyone who found themselves suddenly working from home due to COVID-19. Anyone who worked from home more than 50% of the time over a period of a least four consecutive weeks in 2021 will be eligible to claim a deduction of $2 for each day they worked from home in 2021 due to COVID-19, up to a max of $500 — increased from the 2020 maximum of $400. If you have specific expenses, you can still claim using a detailed method by getting a Form T2200 or Form T2200S signed by your employer. And if you’re not sure, the CRA built this calculator to help.
Track receipts for anything you might use for your day-to-day work, from professional certifications, sticky notes, or even tools for your trade. Child care in your budget? Hang onto those receipts for your dependents, spouses and partners. Paying interest on student loans? Keep those too, along with any other carrying charges or interest expenses. Not sure what to keep and what to toss? Start with these, and if you're not sure, hang on to it.
It’s important to hang onto all of your tax documents for up to 5 years after filing, in case of an audit. If you qualify for a northern residents deduction, it's a good idea to find documentation that verifies your residency before it’s time to file. If you incur unredeemable expenses as part of your job, have your employer complete a T2200 Declaration of Conditions of Employment form, which will help you declare these items for tax purposes.
All slips must go to the CRA, while receipts and other documents usually only come out if you need to resolve a discrepancy. If that day ever comes, you’ll be glad you started this year in a better place than last year with your taxes in order. A little simple preparation can take the sting out of tax season and help you sleep at night.
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Written by
Danny Bradbury
Danny Bradbury is a technology journalist with 30 years’ experience writing about security, software development and networking. He has written for newspapers including the Guardian, the Financial Times and the Globe and Mail.
