Make Sure You Claim the Work-From-Home Tax Benefit

We can all agree last year was a tough one, but as always, Fint.Cloud is here to help you find a silver lining. 

In November 2020, the Canada Revenue Agency (CRA) announced it had simplified the rules for tax deductions as it relates to working from home. With so many people saving money on costly commutes and expensive work lunches, a tax deduction makes the ‘WFH life’ even sweeter. Statistics Canada reported 3.3 million Canadians had transitioned to working at home due to the pandemic as of April 2020, so this tax deduction will have a considerable impact for workers nation-wide. The tax deduction covers home office expenses that you paid, such as rent for your work-space-in-the-home, electricity and home internet fees amongst other costs. 

Anticipating an increased number of applicants, the CRA has made the process easier to apply, including: a simplified form (T2200S), no need to measure your office space, and a temporary flat rate method for finding out how much you are eligible for.

Eligibility Checklist for the 2020 ‘Work from Home’ Tax Deduction

 

If you meet ALL of the criteria:

  • worked from home in 2020 due to the COVID-19 pandemic or by request of your employer.
  • worked more than 50% of the time from home for at least 4 consecutive weeks in 2020.
  • the expenses are used directly in your work during the period.
  • have completed and signed Form T2200S or Form T2200 from your employer (only applicable if the detailed method is used to complete the claim, the simplified method doesn’t require a form!)

Simplified vs Detailed – What’s the Difference?

 With the simplified claiming for home office expenses, a new temporary flat rate method has been introduced by CRA. You can claim $2 for every day you worked from home in 2020, up to a maximum of $400 (200 days per individual). There’s no form required to be signed by your employer, so that alone makes it an appealing choice with less paperwork. It’s important to note that more than one person per household can claim the deduction as long as each household member is eligible, but you won’t be able to claim any other employment expenses (Line 22900) with this flat rate method.

Conversely- maybe you’re not new to the Zoom and pajama-bottoms lifestyle! If you worked from home for more than 200 days, you might be eligible for more than $400 in tax deductions. Then, the detailed method can be used to ensure you capture all the deductions you’re eligible for. But, that’s become easier too with the resources below:

Tax Deadlines

As you know, tax deadlines were extended due to COVID-19 in 2020. This year the deadlines are back to normal timing, so make sure you’re prepared. Here’s the government deadlines for filing your 2020 taxes. 

If you have any questions about this post or tax deductions in general, reach out to us!

Using Technology To Manage Personal Finances and Save Money (Canadian Edition)

I did a recent poll on our Instagram (@fintcloud) to ask people if they would rather learn more about keeping a paperless office, or how to use tech to save money. The results were almost unanimous, people wanted to learn how to use technology to save money! I tried to do a few tips and tricks on IG stories, but think that a blog post would be a better medium.

Carrot Rewards

The Canadian government is giving away millions of dollars to incentivize Canadians to live a healthier lifestyle. You can earn money / points by taking steps and doing some quizzes. Don’t have a step tracker? Just get Google Fit and connect it to this app. They literally pay you to live your day-to-day life. The goals are personalized based on your activity level. I’ve personally earned the equivalent of $15 in less than a year, doing almost nothing. (You do have to log into the app from time to time). For some extra bonuses, my referral code is: jennyt3667

Drop Reward Points

Carrot Rewards pays out into points, and the point system that I use is the Canadian Drop Rewards. Connect your bank / credit cards, and you can start earning points immediately based on your spend with their partners (which includes Uber, Shopper’s Drug Mart, Sephora, Under Armour, Staples, Adidas and more). Including my $15 from Carrot, I’ve earned roughly $200 in Drop Rewards. It’s not cash, but Amazon.ca gift cards are pretty much as good as cash.

The best thing about Drop Rewards is that I find that you can easily stack this with other deals. Since the spend it tracked on your credit card immediately, you can stack this with other promotional offers (in-store specials, online promo codes).

Ebates

Okay, so enough about points. You want cash? Ebates.ca will give you a cash rebates. So before you go online shopping, check if you are purchasing from an Ebates.ca partner store. If you shop through their link, they get paid a commission, which they share with you once your balance hits more than $5.01. I’m still new to this, but I don’t see why this cannot be stacked with the Drop Rewards. Some major partners include Amazon.ca and Ebates.ca.

Just Butter It

Just Butter It is a Canadian finance app that gives you cashback just for allowing it to keep track of your subscriptions. The cashback seems to be roughly 1% of your eligible subscriptions. The bonus of using this app is that you can also easily keep tabs of what subscriptions you are still on. It allows for you to be more aware of those subscriptions that you should cancel if they are no longer in use;.

Mint by Intuit

Mint not an app that allows you to earn or save money, but it is a fantastic way to keep tabs on your personal finances. Connecting all of your financial accounts will allow it to automatically calculate your net worth *caveat that it is not always accurate, particularly if you own a business. I love how easy it makes to visualize your finances. Bonus that it sends you reminders to pay your credit cards. It automatically sets a budget for you based on your previous spend and sends you reminders if spending trends are off.

I know people out there may be apprehensive about connecting all of their banking information to an app. I can understand that and I also felt this way in the beginning, but I think that it is much more beneficial to keep a close eye on my financials and have a full view of it rather than not. Mint helps me ensure that there isn’t fraud on my accounts, and makes me aware of any additional bank fees or interest charges on my account. It has indirectly saved me a lot of money.

Camel Camel Camel aka Camelx3

Love shopping on Amazon.ca for the convenience? Firstly did you know you can subscribe to recurring subscriptions to basic necessities and save more money if you stack these recurring subscriptions? Well, that’s great, but you also need to make sure that these goods are fairly priced. Here comes in Camelx3, which is a price watch for all items.

At one point, I was obsessed with setting this up. I would search for products that I commonly used (like razor blades), and products that I wanted to buy but only at a good price (like a headphone) and setup a tracking such that Camelx3 would alert me via email once the product’s price went down to the price at which I am willing to buy it at.

Your Start Up and E-Commerce Accountant

Jenny Tran, CPA, CMA

Take 15 mins to execute this Christmas personal finance hack

Christmas in more recent years has become a time of reflection for me.  It is a time when I review what has gone well and what has not gone well when it comes to life events, relationships, career and my own financial situation.  If new years is the time for a fresh start, changes, and new goals then Christmas is a time to think about what it is that defines our life purpose.

There has been a lot of firsts this year for me from leaving my consulting job to starting my own accounting firm, getting my first client and hiring my first employee.  In my personal life, I celebrated my twin dogs turning one this year and met some new friends who taught me more about myself.  I attribute many of the good things that happened this year to being able to let go of some of the things that were not so good last year.  Sometimes you have to re-evaluate and make room for more good things in your life.

On that note I’m going to share with you a personal finance hack that took me 15 minutes to execute this Christmas.  I cancelled my main credit card.  Well, to be more accurate, I called in to my credit card company to report my main credit card as being lost.  Why?  Well, these days it is common to have dozens of recurring subscriptions whether it is monthly, or annually and it is admittedly difficult to keep track of these costs.  If you can’t remember every single subscription you have, and can’t be sure that you won’t be hit with a subscription charge for something you’re quite sure you’ve cancelled, then I recommend this hack for you.  I’m now going to have to update my credit card information for all of my subscriptions, but I will gladly do that to be more conscious about my costs.  I assure you that if you do this, you will find at least one subscription that you can do away with!

Best thing about this hack?  I can do this in the comfort of my family’s home while snuggling with my dogs.  Furthermore, Christmas tends to be a slow time for call centres (at least that is what I remember it to be when I used to be the one picking up the calls).  Make sure to thank your customer service representative and wish them well.  And while you’re executing this hack, you can also take a minute to follow my new YouTube channel by clicking here.  Merry Christmas and happy holidays!

Your Start Up and E-Commerce Accountant

Jenny Tran, CPA, CMA