More Money Podcast - 269 Filing Your 2020 Taxes: All Your Questions Answered - Susan Watkin, Accountant, Educator & Spokesperson for TurboTax Canada

Episode Date: March 4, 2021

It’s that time again…tax time. But this tax season may feel a bit different than other years. And that’s because 2020 sure was a weird year. Many Canadians earned income through various benefit programs or started earning self-employment income for the first time. So what’s the best way to navigate this new tax season so it can be the least stressful possible? That’s why I’ve got Susan Watkin, accountant, educator, and spokesperson for TurboTax Canada on the show! I took some time to gather all the key questions people had about taxes for this year, and Susan graciously answers all of them. Hopefully, you’ll feel a bit better about filing your taxes this year, because it doesn’t have to be a pain. Just take some time to organize your documents (feel free to download my Tax Prep Checklist), pick a route to get your taxes done (click here to get 20% off TurboTax Assist & Review or Live Full Service), then choose a date and time to get it done. Remember, the sooner you get it done, the sooner you can get your tax refund…or at least not have to think about taxes until next year. For full episode show notes visit https://jessicamoorhouse.com/269 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome back to the More Money Podcast. I'm your host, Jessica Morehouse. Welcome to episode 269, your bonus episode for this week. Well, the reason we're doing a bonus episode, and this is something honestly I've done every year, I would say, I'd say definitely the last four or five years. I don't know if this happened the first year. It doesn't matter. It doesn't matter. That's ancient history. But on an annual basis around this time of year, I have an expert on the show to talk about taxes because we are officially in tax season. And this tax season, I think is a bit different because of what's happened. You know, like the little pandemic that occurred in 2020 occurred as if

it's the past tense. We're still in it. We're still living in this time of pandemic times. So with that, I think a lot of us have a lot more questions about taxes, especially anyone, you know, any Canadians listening who, you know, got some of the benefit programs, a lot of very confusing things about taxes there. And you may also have questions if you're newly self-employed. I know so many people this year become freelancers or started a side hustle or have earned some kind of self-employed income. There's a lot of questions in the air, basically. And that is why I have Susan Watkin on the show. She is an accountant, an educator, and a spokesperson for Intuit TurboTax. And she has been an accounting professional for over 20 years. So she really does

know her stuff. And she's been working with businesses and individuals and their taxes for the past 13 years. Education is a big passion for Susan, which is why it's such a treat to have her on the show. You can just tell how passionate she is about taxes, which is great because I'm also passionate about taxes. I feel like if I had to switch careers, I'd probably be a tax accountant if I'm honest. I probably would, which is funny because just me thinking of young Jessica in school, I could just see her being like, what's wrong with you? You're the adult I didn't want to become. And look at me now working in finance and having the best old time. I don't know. I don't know how this all came to pass, but here we are. And you're listening to my podcast all about personal finance and taxes. Any mahoo. So we dive into some really important questions that I know you all have. I've

been scouring the internet. I've been kind of gathering all the messages and emails and tweets I've been getting throughout all of the past 12 months that people have been having about taxes. And I asked Susan, what's the deal? So you're going to learn a lot in this episode. But before I get to that, I do want to remind you, because TurboTax has been the sponsor for the past several episodes. If you do want to file your taxes, you can get 20% off their assistant review or their TurboTax live full service programs. If you go to jessicamorehouse.com slash TurboTax, get 20% off. I mean, yeah, why not? You have to file your taxes anyway. Might as well get a little discount while you do. Also highly encourage you if you do have other

questions or just want to learn more about taxes, quite honestly, and this is the truth, the TurboTax blog actually has some really great resources. I have been writing and doing a lot more videos about taxes. And honestly, every time I Google, their stuff comes up and it's good. It's good stuff. It's really like translating all the kind of jargon that the CRA's website loves to kind of throw around on their website. So highly recommend their blog. Make sure to check out the show notes for more information about some of the things that we've discussed in this episode and some important resources, jessicamorehouse.com slash 269. But without further ado, let's get to that episode with Susan. Welcome to the More Money Podcast, Susan. So excited to have you on to talk about taxes

because we are in tax season officially. Yeah. Thank you so much, Jessica, for having me here. I'm excited to talk about it too. Yeah, so I'm curious. Well, actually, let's start off first before diving in because I'm very excited to dive in. I have a whole list of questions. Can't wait to ask you them. But tell me a little bit about yourself. What's your background? What's kind of your role in the tax sphere? Well, I've actually been working with individuals and businesses in tax for over 13 years, but I've been in accounting for over 20. And I am fortunate enough that I get to work alongside with the amazing team at TurboTax Canada and their experts to really, really help people understand what's going on and how to deal with their taxes and get the, you know, get the best tips to have that the best return, right?

Absolutely. Awesome. Well, okay, I guess with that, let's dive in because I have so many questions. I've never in my almost 10 years of being, you know, a personal finance content creator, I've gotten this many questions in such a short amount of time about taxes, especially just like starting in the spring onward. And I think it's because a lot of people's incomes are different than they normally are. Either they've had to get some income through some of the benefit programs, or they became a freelancer or have some sort of side hustle and people have no idea what to do. And I mean, I totally get it because as someone who's like, I'm now self-employed, I've been self-employed for four

years. But before that, I was an employee. And being an employee when it comes to tax time, it's pretty straightforward. When you're dealing with some self-employed income, the waters get murky and you're like, what do I do? But before we kind of talk about that stuff, because I do have some questions specifically about that, I do want to kind of talk and touch on the different benefit programs because, you know, you've probably been seeing this in the news. So many people don't quite understand how they're being treated in terms of income tax. So let's kind of first start off with the kind of one that I think people are most familiar with. The first one that really came out in the spring, the Canada Emergency Response Benefit, CERB, or as I call it, CERB, and no one else does.

But doesn't that sound like it should be called CERB? But anyways, so can you kind of explain how, you know, if you were a recipient of the CERB, what does that mean in terms of your income taxes? Yeah, absolutely. Yeah, it was 2020 was quite the year, you know, for everybody. And it was it really was a year, you know, for everybody. And it was it really was a year of earning money in a different way. As just as you said, like so many people took advantage of these benefit programs, you know, and, you know, many people change jobs, lost jobs. So

it is something that is different for a lot of people. When it comes to CERB, which is it's a great debate, curve or CERB. It's an alphabet soup of acronyms here. And that's what it was last year. And so however, however you say it, it is important to understand how it works. Now, when we look at, if I look at CERB, I want to look at some of the other recovery benefits kind of at the same time, because they're all treated very similarly. But there's one outstanding difference. And this is when CERB first came out. The government was not taxing this benefit. It was an emergency response benefit that meant money out as fast as it could to help people.

And no taxes were withheld. So that means that if you qualify for a certain amount of money, you got that full amount. And what this means for many people is that depending on their other income throughout the year, they could wind up seeing that they owe some income tax on that money because nothing was held back as we would experience normally in an employment position, or even where, you know, employment insurance and other benefits do have some taxes withheld. So that was the biggest thing when it came to CERB, is to be prepared that there were no taxes withheld from that benefit. And if we look at

the other benefits that people were receiving, and this comes into now, we call them the recovery benefits, the government now changed those that there is a fixed amount of tax being withheld. So it's 10% of the qualifying benefit amount is being held back to credit towards your income taxes. So this way, for people that went from CERB to CRB, or even, you know, the CRCB, so the caregiving benefit or the sickness benefit, they would have had money held back for them very similarly to, you know, employment insurance. So they wouldn't have had necessarily as much taxes owing on that income that they were earning. So that that's one of the biggest things that we're seeing in terms of making sure people are really clear with CERB and CRB, they're different programs, and they were treated

differently in how the money was given out. So for those recovery benefits, because you mentioned 10% is being kind of withheld, that may not be enough. So some people may still be faced with a tax bill. Is that correct? Yeah, it all depends on somebody's specific situation, right? Like, for example, if they, if they were working part of the year, and then they they got some of those benefits, and then they went back, depending on how much how much tax was taken off of their employment benefits on their sorry, their employment earnings, and then these benefits, at the end of the day, if they got served, which didn't have any taxes payout, they may still see that they have taxes

owing. So where some people were used to maybe getting a refund each year, some might be finding that they're not going to be getting one or it won't be as much as they're used to. Yeah, I think that's the biggest change. A lot of people are used to just filing their taxes and getting money from the government. And it seems like such a, you know, oh, how nice this year, you know, I mean, maybe people kind of feel how I feel with tax time, which is me owing money. I don't get refunds anymore. I just owe more money. But I mean, that's kind of just how it goes. And yeah, thanks for clarifying all that. I think that's so, so important. Because again, like you said, there's so many acronyms and so many different benefit programs. And I think a lot of people are very confused because they all kind of sound similar, similar, like CRB sounds

very similar to CERB, but they work very differently. So super important to understand the differences. Now let's talk about another big change that we've seen in 2020 and moving into 2021 is more people are working from home, which I think is great because I know being an employee, man, did we try to fight for, hey, can we have some work from home days? And the company would always be like, no, no, no. Well, now everyone kind of got those wishes of being able to work from home, for better or for worse. I feel like lots of people maybe aren't enjoying it. I love working from home. So with that, though, we need to kind of consider what does that mean in terms of filing your tax return? What could be some credits or deductions people who did have to work from home?

What can they claim? Are there rules, restrictions? What should people know about? Yeah, you're absolutely right. It was a huge thing. And next to those, the benefits we just talked about, it's the same for me. This is the next most common question people are asking because it's something that is really unfamiliar for a vast majority of people. But yet millions of Canadians are working from home right now. And so moving to this work from

home situation, it's different when it comes to employment expenses. So we have a lot of people that always were working from home or they had a job that required them to provide certain supplies of their own. And for those people, things don't really change because they're used to the employment expenses. They have forms they need to complete. But what was brought in for 2020 only, that's really important for people to understand, this is a 2020 only is the the government created the temporary flat rate method okay so every flat rate method was to help those that were now forced to work from home or needed to work from home because of COVID-19 and what this is it's this it's a simplified method of the work from home portion of employment expenses so this has nothing

to do with other employment expenses it's strictly work from home portion of employment expenses. So this has nothing to do with other employment expenses. It's strictly work from home expenses. And what the government has done is said, okay, let's make this a little bit easier for everybody. We're going to say if you're eligible and by eligible, that means, you know, 50% of your time, you had to work from home for a minimum of consecutive four weeks in 2020. And it had to be due to COVID and what that does is that allows you to claim two dollars per day that you worked from home to a maximum of four hundred dollars the other benefit of this what they've done which is which is very different from our typical method of employment expenses which is called the the detailed method we'll

call it for the flat rate method we don't have to get any forms completed by our employee which is called the detailed method we'll call it for the flat rate method. We don't have to get any forms completed by our employee, which is our employer, which is very common. That's what we normally have to do. Also, we don't have to have any supporting documentation, which is also really good. We also don't have to actually calculate our space in our home. So all of these things are very different from what those people that are used to working from home or having employment expenses are used to doing. So this is what this has done is to make it simpler so that people can

have in a simple claim, the $2 a day per working from home due to COVID to help cover those expenses in the house. So we're talking about things like your electricity usage, internet access fees, we've got some office, basic office supplies, some cell phone usage, some limited maintenance, and even rent, you know, if you're renting a home or you're renting an apartment. So a lot of these things are considered in that work from home expenses area. So instead of actually itemizing all of this and doing all the calculations like we would have to do in our detailed method, this temporary flat rate method avoids all that and we're

allowed. So as long as you're eligible, you fall into that eligibility criteria, then you're good to use that. That being said, I want to add is that if you are if you have more expenses than that, like for example, if your employer has been requiring you to buy other things like or use your vehicle, you know, and claim those kinds of expenses, there's there's other things that you may need to do, those will require you to go through the detailed method. Or if you think that you've spent more than $400 on all of those things, then you would have to go through the detailed method, which then does require the forms from your employer. So that's the T2200. It requires, you know, the supporting documentation, it requires you to calculate your workspace. So that's back to the quote unquote normal way that we were doing that before. Okay. For someone, because I'm just like putting myself in the shoes of someone who's going through this for the first time and you're like, that sounds

really intimidating and complicated. Is this something, I guess, if you work with a tax accountant, they will guide you through that. And if you were to use a software like TurboTax, it would also kind of guide you through what you need to, what kind of documents you may need, like which method to use and all that kind of stuff. Absolutely. If you're working with, if you're working with a professional, for sure, you know, somebody has definitely been talking through this. And if you are going to be working with TurboTax, you know, whether you're doing it yourself, and you're working through the software yourself, or you're working with one of their, you know, their tax experts that can actually support you through this, you know, it's going to help you understand, it's going to walk

you through, okay, what do I need to have? What do I need to know? Do I qualify for, you know, it's going to help you understand, it's going to walk you through, okay, what do I need to have? What do I need to know? Do I qualify for, you know, for this particular work from home flat rate method, you know, and it's very simple. I was actually, you know, I was just in the product the other day, and playing around with how this works for the flat rate method. And it's quite simple, you know, it's, it's a few clicks of a button saying that I qualify and how many days I put in, and it's all done for me, you know, and it's, it, it's, it's a few clicks of a button saying that I qualify and how many days I put in and it's all done for me, you know, and it's, it, it's, it is simplified, but I can understand that it can feel a little bit daunting to people because it is new, right? So it's really, really new. And what I have seen in my personal, in my personal career is that we get a lot of confusion between people that are, you know, working from home, or we've got commission sales, have expenses or then we have our business use of home expenses and they're all very different things.

So what you can do as a work from home individual is not the same as somebody who has a business out of the home. So it's really important that people understand. And one of the biggest things is that no employee can actually claim the expenses for capital assets, where we're talking about, you know, furniture, monitors, you know, laptop and stuff like that. And that's, I know that that's a big concern for a lot of people. People have talked about that having to buy equipment at home. And so they can't claim that it's only you'd only be able to claim that I guess if you were self employed. Yes, exactly. No, unfortunately, whether you're a salaried employee or a commissioned employee, you capital expenses like that are not allowable employment expenses. That is too bad. I'm sure

lots of people like, Oh, I thought they were. Exactly. And this is why it's really important to stipulate that. Like when we're talking about work from home expenses, it truly is work from home expenses. It's the cost for you to be working in your home. So since I mentioned self-employed, something that I'm fairly more familiar with, though it was very daunting, I will say the first year that I filed self-employed income taxes, you know, a lot more people have, you know, become freelancers or working a contract work or have a side hustle or, you know, completely self-employed, started their own business through the pandemic. And it can seem daunting. I think,

not only is running your own business in whatever capacity, you know, a good, it's a lot of work, but then there's the taxes and the accounting kind of sides of things. What would you, some key things that you would like to share with people who they're entering this kind of tax season the first time as someone who is self-employed or has earned for the first time ever self-employed income? What are some things that they may not be aware of? Because maybe in the past they were just an employee. Well, this is again another, there's so many good things that we're talking about a lot with a lot of people right now, because we, we did see that huge move from people that went from employed to self-employed and a lot of people, and I think it's, it's great. Like, I mean, it's, it's fantastic to see a boom of businesses, people working on things that they love,

but yes, when it, when you start a business comes a whole different slew of responsibilities when it, in terms of accounting, you know, your bookkeeping, your accounting records, now your taxation. So I can, I can appreciate it very much so that it can feel daunting because you're, you know, you're dealing with this big change in your life. And, you know, going from, you know, employment to self employment, what do we do? So what I like to tell people is, you know, make sure you're managing what you're doing and you understand what you're even doing, you know, like, what kind of income are you earning? What type of business are you doing? Because depending on the type of business is

going to help you understand, you know, what other kind of benefits do you have with this business? Like what kind of expenses relate to that type of business? You know, are you a professional providing services? Or are you a business providing retail products? Are you selling things like that? So it's important to understand because this will help you determine not only where it goes on your your income tax return. So for newly self employed sole proprietors, it is part of your your, your original T1 general, but it's called a T2125. It's the statement of business or professional activities. And it's a form that people may be concerned about, but it's actually pretty straightforward. And I always tell people that if you're a little unsure about what you want to be

doing, actually just Google that, Google that form, T2125, download it. And it's going to basically give you a list of what you need to get ready for that those taxes. So it kind of helps you prepare that accounting because it's, it has its own set of rules. And like I just mentioned with the work from home, like it even has its own set of rules around business use of home expenses, which is different from work from home. So, you know, there's, you know, rules around business use of a personal vehicle. So again, a lot of things, this comes down to anybody who's becoming self-employed. You do have to take the time to understand what it means to be self-employed, understand what your responsibilities are.

And then also to the next level, see what you can claim based on the income that you're earning, right? The goal of having a business is to earn a profit. What is it going to cost you to earn that profit? So then, you know, I direct people to, you know, things like there's the CRA has a very comprehensive list of Yeah, it really does. It does. Yeah, really great list of business expenses. And I tell people all the time, get over there, have a look at it. But then also consider for yourself, you know, because I get asked quite often, as I work with many, many businesses, you know, can I claim that? Can I claim that? And I always go back to people and I say, it's about the reasonability. It's about, do you need this

product? If I was to ask you, could you still sell what you were selling? Could you still provide that service or that product without that? It's going to help you determine was this a necessary expense. So reasonability is really key, you know, did I need this to earn my money. So we want to make sure our, you know, our new small business people is exciting, you're on this new venture, this is great. But you have to understand that there are rules, you have to understand what your obligations are now, but it doesn't have to be daunting, because there is, you know, there's a lot of great, you know, software to help even, you know, software like, you know, QuickBooks Online, QuickBooks Self-Employed, right? And this is all going to help you get yourself organized.

Yeah, what I tell every person that I meet who's, you know, either has a side hustle or self-employed or whatever the case is, it's really about taking that time you need to, to also remember, hey, you are, if you're just a sole proprietor, like, you know, I am, you are the CFO of your company, which means, you know, and you're also the secretary, you're everybody. So you need to take that seriously. And that means, you know, honestly, invest in some accounting software. It's not as expensive. It's also a business expense.

If you don't know if it's your first kind of time filing taxes, you know, and you're like, I don't feel comfortable doing it on my own using tax software, then use a professional. I know TurboTax now has a way that you can work with a professional with the software. So it's, it's, it's one of those things where it's like, it's, it's going to be daunting the first time you do it, but then the more you do it, the easier it becomes. And you actually, I, now I look forward to taxes. I get excited about what I can claim for business expenses. It's very exciting. It's kind of like a fun game. So it is daunting at first, but it can be very exciting. But like you said, I get so many questions. I'm like,

honestly, there's so many great resources. Actually, I point them a lot to the TurboTax blog because they actually do have some really great explanations of things. But also the CRA website. I know it doesn't sound super exciting, but there's lots of great information on that site. There is. And this is what, you know, we work really hard on the blog to help kind of, I'm going to say we take what the CRA is saying and we're trying to put it into, you know, situational ways so people can make it a little bit more clear. But the CRA, it's the best way to go because this is the information from the source, right? This is where they've broken down,

you know, the Income Tax Act, they've broken this down for you. And they have tons of amazing information there for you. And it's really, it's usually just a click away in a Google to find these lists. And it's, I agree with what you're saying. Sometimes it can feel a little bit overwhelming when you're starting a new business, because there's a lot of things you're focused on that are not accounting and tax, you know, you're focused on selling your product, the marketing your product. And most of us, come on, we all focus on the fun part of our jobs, right? Doing the administration and the, the accounting and stuff usually does come last. But what I what I say to people is that,

yeah, okay, it's going to be a bit of work to get this sorted. But this is the best, one of the best things you can do for your business is get yourself organized and understand what you can do. Because the whole purpose of having a business is to earn a profit. How do we earn a profit? How do we know? It's by tracking everything, tracking that income, tracking those expenses, those costs. And then we can see that our business is growing. So we understand what we're working for. So at the end of the day, it's a really good thing to do, you know, and then you've got it easy. Just don't leave it till the end of the year. Should be working on this throughout the year. 100%. I think the best thing that I did do, because I did start working with an accountant the first time, like, all right, let's, I don't

know what I'm doing, because I need some help. And one of the things that was just is make sure you set it in your calendar. So once a month, that's when you kind of gather all your statements, your expenses, put it in your accounting software, get it organized once a month. And it won't take too long, especially because you're doing it frequently. If you leave it all to the end of the year, that's going to take you a weekend or a couple weekends. And also just talking more about just the tax filing, no matter what your situation is, and this is something that's taken me a long time to get my husband on board with, he's still sort of on board. It's still taking some time because it's like I have a process. I work on my taxes throughout the year. So honestly, it takes me a few hours just to get

everything organized and have it all ready to file. But I know lots of people are used to, well, I've got this box of receipts, so I guess I'm going to take like a week to go through them. And my husband used to be the exact same way. And now he realizes actually how, how less stressful it is if you are kind of working on and organizing your taxes throughout the year, whether you're an employee or not. Cause again, you know, if you're an employee, there's still documents you need to get or like if you make, you know, charitable donations, make sure you, you know, right after you make that donation, get that tax receipt, put it in a folder so you don't forget. It's so, so important just to make it less stressful because tax season doesn't have to be stressful.

It doesn't. No, it doesn't. You're absolutely right. Just a little bit of planning and you'll be good to go. And then just learn from last year, basically. If you had a dreadful filing last year, okay, then learn for yourself. No, I'm going to make this better. I'm going to plan better this year. And that's it. Yeah, it doesn't have to be new tax credits and deductions or ones that maybe some of us have forgotten about. So I know there is a new one that I didn't know about until 2021. So I'm like, okay, the new digital new subscription tax credit. So do you want to kind of explain what that is? Sure. Yeah, actually, yeah, it's not new. Oh, it's not new. Okay. Well, it's new to me. Last year, I believe it's when it came out. And so what this was, what it allows for us to do, and this works only when it's a qualified Canadian journalism organization that's been up with that has, I believe it's a whole application process that this organization has to go through with the with the CRA. And what it allows for us to do, I believe it's an effort for the government to help support journalism, right? It's so important to have journalism. Yeah.

Which is so great. As someone who used to work, I mean, old career used to work in newspapers, and it wasn't a fun time. There was a lot of layoffs. So I'm like, we need to support our newspapers and our media in Canada. Well, and that's what I've heard, right? So when I think that this is the I can't obviously say why they did it. But I think it's a great thing that this is coming to really support journalism in Canada. And what it's going to do is and now it also helps you to as the individual, right? So it's for those of us that purchase that any digital news subscription, and it's a non refundable tax credit. And what that does is as long as it's a non refundable tax credit. And what

that does is as long as it's a qualifying subscription, which is usually you're paying an annual fee, and it has to fall between 2019 and 2025. Okay, so it's not it's not a forever one. So it does have a lifespan. And so but you're absolutely right. A lot of people didn't know this when it came out, you know, a couple of years ago, it was kind of a silent one. And a lot of people do ask, especially I mostly asked when I speak to journalists, that one comes out.

And yeah, it really is to encourage people because when we're seeing in 2020, though, you know, people's lives change. So they might have different deductions and tax credits that they didn't have last year. And they're probably thinking, how am I going to get any taxes going down? Yeah, you're right. There are things people don't realize. So if you've got some digital new subscriptions, check this out, make sure to see if you're eligible to apply that as a non-refundable tax credit. Absolutely. Another one is the first time home buyer tax

credit. I know. I mean, I live in Toronto and the real estate market here is somehow bonkers. I thought it would cool down because the pandemic if but no, everyone apparently decided they all want to move. And so here we are. So a lot of new first time home buyers. What is the first time home buyer tax credit all about? Well, actually, I'm gonna have to correct you. Of course, it's called the home buyers amount. Oh, thank you. Thank you for it's called the homebuyers amount. Oh, thank you. Thank you for everybody calls it that because we actually have a different note because it's I think I think what happens is if we have the first time homebuyers incentive, which is run through HC, but so with the CRA, when it comes to income taxes,

it's called the homebuyers amount. So again, it's another non refundable tax credit. And you can claim it to $5,000 for the purchase of a qualifying home. It has to be, you know, the same year that you acquired the home and you didn't have another home. So that's their way of saying it's the first time thing. So you're not coming from one home you've owned to another home. This is technically your first home. Or if you haven't owned a home, this is technically your first home, or if you haven't

owned a home in the previous four years. So it's kind of almost like a new new home buyer, right? So it is something to look into, right? And everything is based every all of these tax credits are really based around your unique tax situation. So what we talk about here is, is great as ideas, but you have to, you still have to go and look at it and make sure that, Hey, do I qualify for this? Is this something that I could be eligible for? And it's definitely something if you, if you are a first time home buyer, check this out because you don't want to leave this type of tax credit off the table. Yeah. It's money on the table. Right. Exactly. So it's, it's, if you, especially, like I said, in a year where we might not have the

kind of expenses that we used to, if you were one of those people that bought a home for the first time, definitely make sure to check out the home buyer's amount. Another thing that I noted down when I was kind of looking at some tax credits and deductions, and you can definitely tell me if there's any other ones that you want to highlight, is I wrote down the Canada's Workers Benefit. Do you know what that is? Because I don't. Okay, so this is one of those where so we have, we have deductions, we have non refundable tax credits, the Canada's workers benefit is a refundable tax credit. So this is actually a amount of money that comes in, you know, we've got our money in for our taxes,

then we have our deductions off. And then we have our, you know, our taxable income, our taxes are calculated, then we have our non refundable tax credits, this comes off the bottom, right? So this is the one that says, okay, they're going to help individuals and families that have a certain income level. So we're looking at low income earners that are working, okay, so it's not for people that are unemployed. But these are people that are working, but their earnings are at a certain level. And they have to there's a bunch of other criteria based on age and marital status, I believe you have to be at least 19 years of age, it has a couple of parts to it. And it's there's a basic amount. And then there's a disability supplement. And, and the rates as as many of our refundable credits are many of our credit credits in general, it's they change based on what we call the adjusted net income. So it's all based on your income. So if you hit a certain level, you're going to get this amount, but every dollar you earn more will adjust it, right. So, so if you have been working, always when you're on, you're filing your taxes, if you're doing it yourself, make sure to tick this box off to apply for it because it's going to be done immediately on the tax return because it's a stress.

So this isn't a benefit that comes after this immediate benefit on your tax return. And it's just it's the same as well as the climate action incentive. And that's what that's also pops on. And that's only for four provinces, though, in Canada, Ontario, Manitoba, Alberta and Saskatchewan. And that's one that's also pops on. And that's only for four provinces though, in Canada, Ontario, Manitoba, Alberta,

and Saskatchewan. But it's the same thing. It's another refundable tax credit that's done immediately. So if you're in one of those provinces, make sure you check the button. So that's sometimes that what sometimes people don't realize is they're like, you have to, you apply through things with your tax return.

So if you think you might qualify, click the button that says consider me for this, you know, because it may be a benefit for you. And it's something like this, it could help your tax return. Absolutely. So before we kind of move on, are there any other tax deductions and credits that people should definitely remember this time? Yeah, absolutely. In my in my practice in my my years, a couple of the ones that I've seen that were missed quite a lot is people don't take enough advantage of medical expenses. And that's really understanding. So again, we go back to the CRA super comprehensive list of every type of medical expense. So even for people that are getting benefits paid, if there's expenses that aren't being paid back to in full, like these are medical you know those all the prescription expenses that you're not being reimbursed for you know come

make sure you're looking at this because you can claim this for a 12-month period providing that you know the it ends in 2020 for your 2020 tax returns and this was something you didn't claim before so it's sometimes some people figure it's not worth it but you never know okay because it is based on you know three percent of your income type of thing, like trying to make sure that you're above and beyond it. But it's one that I see that a lot of people don't realize because there's a ton of different things you can claim for medical expenses. The other one is union and professional dues. Like this is a deduction of your income. And this is where, you know, when you're required, if you're part of a union, or if you're part of a regulated organization that requires you to pay an annual professional

fee or annual due, you know, this could be deductible for you. So you want to not don't forget about this. Some people put things aside and say, well, what's the point? It doesn't matter. You know, it's just this is just that, hey, hey, $150, but that's $150 off of your taxable income. Yeah, do you want to give the government more money? Like, I don't think so. Exactly. It's exactly that. It's like, no, no, like, like, just think about and this is where if you, you know, if you're working on your tax return yourself, and you're, you know, if you're using a product like, you know, TurboTax Standard, searching 400 different deductions and tax credits for you. So it's going to help you where depending on how you answer questions, it's going to help you say, hey, did you have this?

And it's going to walk you through that. So that's, that's a really good thing to do. So don't don't dismiss something you've paid for last year, because it may be something you can get on that tax return. Now, I know, you know, we've talked a lot about filing your taxes. I think a big concern of many people, especially depending on, you know, kind of their work situation in 2020 is, well, what if I can't afford, you know, what if I'm not going to get a tax refunded? Also, if I get a tax bill, what if I can't afford it? I know I did read there is some kind of relief. Trudeau announced that the CRA won't be charging interest on overdue taxes from benefit programs for one year. And also, I know that you can request some installment payments. But you want to kind of explain if you're in a situation where you just don't have

the money to pay your full tax bill right away, what are your options? Well, so the first thing I want to say, what I see is a lot of times when people are looking at this and they think okay i'm not going to be able to pay these taxes only they just don't file the taxes and this is something do not do that file it on time even if you cannot pay the bill because this is one of the biggest mistakes i see because what will happen is is if you owe money and you don't file on time now you're going to add not only interest to taxes owing, but now you there's potential late filing penalties. And these are, you know, this could be as much as about 5% of what you owe, right? So just get it filed, and then contact the CRA to make arrangements, they're going to work, you know, in most cases,

they work with people, like, as you just said, like, they have all sorts of plans. I don't know, in most cases, they work with people like as you just said, like they have all sorts of plans. I don't know, you know, all the specific ones that they do. But I know I've had many clients and many people that I've known that have gone through to make, you know, deferred payments and make payment plans and make arrangements. You know, they're there to help you to do this. But just do not not file your tax return just because you can't pay it. With regards to what you're speaking of is regards to the interest relief that's come out. So this comes down to when we have individuals that in 2020, that they had a taxable income of about $75,000 or less, they're not going to be required to pay any interest on any income tax debt for 2020. So this is just for the 2020 tax year.

So if you come in, you have any taxes owing for the 2020 tax year, you've had a taxable income of $75,000 or less. You do not have to pay interest. Doesn't mean you don't have to pay it. Yeah, I just want to clarify because you don't have to pay interest on it until April 30th, 2022. So and I believe that this is regards to when you've received that income support, like you mentioned, those benefits. So when you've got that kind of tax, less taxable income, you've received these benefits, you know, or similar could be provincial emergency benefits. It could be EI where the interest relief is going to kick in for you. Okay. And it is,

it's going to be, I'm told it's automatically applied. Okay, so, but when we're looking at people that didn't go for that didn't get any of these benefits that didn't go for any emergency benefits, but they still finding they have a big tax bill. And they're like, Oh, my goodness, how am I going to pay it? That's where file, give them a call. Because then you can work out some kind of arrangement with them. So it's it's all about, I like to I usually tell my clients, it's just talk to them, you know, they're gonna, you know, they'll work with you in most cases, you know, and it's to try to help and create a situation. Just don't ignore it. That's the biggest, just don't ignore it when, you know, and,

and just put it aside because that often will make things worse. Talk about, you know, making a stressful situation even more stressful. So yeah, it's, it's, it's not ideal, but you know, to make it worse, you know, it would be like just ignoring the problem and that's not, it would be like just ignoring the problem. And that's not, not something you should be doing. Exactly. Now, before I let you go, I know TurboTax has evolved so much in the, the, I mean, several years when I first used it as, you know, just the standard program when I was in my twenties. So this is, you know, going back quite a bit. It has changed so, so much. I mean, for better. I mean, the internet was like new back then, basically.

And so there's so many different versions of TurboTax now. Do you want to kind of explain, you know, if someone goes to the website and sees all these different options, like how do they know which one to choose? What are the difference between all these different programs now? Yeah, great. Yes, it has been around for a long time, 1993. And yeah, it's been a part of our lives. It was named, it was QuickTax before, but then it was changed to TurboTax. But yeah, over the years, it really, it has really evolved, especially in the last 10 years, with the technological advancements, you know, it's really making doing taxes that much easier for all of us, you know, moving to that online platform, you know, working in the cloud, you know, added to that, you know, the most recent thing you've touched on it earlier as well is that TurboTax has brought in the human

help. So now we've got these live tax experts that can walk through the returns, review them, or even take care of the whole thing. So when we're looking at this, you know, all of these products, it's really to say, well, how do we feel? What's we're looking at this, you know, all of these products, it's it's really to say, well, how do we feel? What's my comfort? You know, we know everybody is, you know, can has different confidence levels in their taxes. And there's really is a product for everyone. You know, it's you don't have to go it alone. And that's that's one of the benefits of TurboTax. So it's whether you start at the free product, which, you know, which can help the majority of people, or we start the standard product, which is the most common,

that's the one where we got that great questionnaire that really, which I love, which is literally the, did you work? Why? Yes, I did click a button. And it really kind of walks you through it. And this is where we're getting, you know, the searches of 400 credits and deductions. So the products kind of grow from there. So when we when we keep going up, we've got if you have rental or investment income, well, then you need to work with Premier, okay, because that's able to walk you through the specifics of having that. If you're self employed, so sole proprietorship, you're going to be getting the self employed version, you know, which is going to help you go through the whole T21-25 in addition

to all of your individual tax stuff. So then, you know, this is for all of us that feel confident, we want, we're okay, we're going to go do it ourselves. But as we're working in any of these products, and we're deciding, you know what, I just, I need help, I want a little bit of support. Now we get into our human help editions of TurboTax. And that's with our TurboTax Live Assist and Review, where somebody is going to actually answer your questions, look at your return, you know, make sure you've ticked off all the right boxes before you submit it. And then finally, for those of us, you know, that's like 2020 was enough for me, somebody else, my taxes, you know, and I understand that I can appreciate it. I've heard that from many people, well, then we've got our TurboTax Live Full

Service. And that's where the tax expert, human, actual human being is going to take it and just do it for you. Start to finish getting it done. Yeah. I think that's a lot of people this year. You're like, you know what? I just don't want to deal with it. I mean, to be fair, I don't like doing my, I like, I love preparing my taxes, but I don't like actually inputting all that data. I like to hand it off to someone and be like, it's your problem now. Well, then, you know, and you know, you've got somebody else looking at it, right? And this is their skill. This is their expertise. And they're going to make sure you're maximizing those deductions and minimizing those taxes only. Absolutely. Well, it was such a pleasure chatting

with you, Susan. You have so much great information. I think this is hopefully going to ease a lot of people's stress and hopefully inspire some people to get their taxes done sooner. I always tell people, get it done sooner rather than later, because we want to like move on with our lives. I mean, if you're going to get a tax refund, you'll get it sooner. And just don't delay because you know, it's not fun being like, Oh, shoot, I have a week until the tax deadline. I better get this done. Exactly. And thank you so much, Jessica, for having me. It's been a pleasure talking to you. I love talking about taxes and finance and helping everybody, you know, have their best return for this year.

And that was episode 269 with Susan Watkin from TurboTax. Again, check out the show notes, jessicamorehouse.com slash 269 for more information about what we talked about, some of the resources that you may want to check out. I'm also going to include some links for anyone who has earned some self-employed income this year and you just don't know what you're doing. And that's totally cool. I have actually created a ton of videos and blog posts specifically for you that are honestly the most popular pieces of content that I've ever put out, which is interesting. I guess people just want to know. So I'm going to include those in the show notes. So definitely check that out. But again, as I mentioned earlier in this episode, if you do want to file your taxes and want to use TurboTax

Assistant Review or TurboTax Live Full Service, go to jessicamorehouse.com slash TurboTax to get 20% off. Also, just a reminder, if you want to use those or any of their other, because they have lots of options. So go to their website, TurboTax.Intuit.ca to find out what the options are. But basically, no matter what you do, you can try out all of them. And also I made a video on my YouTube channel that shows you this. You can go through the whole process and you don't pay until you actually file. So you can test it out. There's no, um, you know, there's not, you don't lose anything. Um, if you just test it out and, uh, see which kind of program or software that you want to do, maybe you want to try out the DIY kind of version and you're like, no, I just want someone to do it for me. And then you can do the

full service. You can try those out. You don't pay until you actually file your taxes. So nothing to lose there. What else do I have to share with you? Okay. Just a reminder, as I mentioned in yesterday's episode, that I am giving away some books. Guys, just go to jessicamorhez.com slash contest, giving away a ton of books. That's where you can enter to win one of the books. Also make sure to follow me on Instagram because I've been doing this pretty much weekly, I would say, um, some amazing AMAs, ask me any things, or I'd like to also do sometimes I like to switch on it and to get kind of your, uh, I don't know. I asked you a question and then I kind of share all the answers and it's great because you're anonymous. So no one knows who you are. So you can be very honest with me. I'm the only one who sees it. So if you want to follow

me on Instagram, you can find me at just guy more house. Of course, you can also follow the podcast at more money podcast on Instagram. You can also follow the podcast on Twitter at more money pod. And I'm also on Twitter. Actually, please follow me on Twitter. I'm like literally just a few followers away from finally cracking 14,000 followers. And I feel like I've been on the cusp for like a year and it's driving me bonkers. So you can find me at J E S S I underscore Morehouse to follow me on the Twitter, or you can follow me on the Instagram, Jessica I Morehouse, um, and learn something. And, uh, yeah. And like I mentioned to you, I've got a YouTube channel that, uh, you may want to check out, uh, that has a lot of great video tutorials on taxes, uh, and other subjects too. And I'm putting out a lot more videos because

it's actually a lot of fun. I actually love making videos. So you can find me at jessicamorehouse.com slash YouTube or just Google Jessica Morehouse in YouTube and you'll find me right there. Okay. That is it for me. Thank you so much for listening. Make sure to get your taxes done. Just put it in your calendar and just get it done. Just get it done and you can move on with your life and just not think about taxes until next year. So yeah, I'll be back here next Wednesday with a fresh new episode of the More Money Podcast. Thanks for listening.

Have a good rest of your week. Have a good weekend. I'll see you next Wednesday. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.