2022 tax season primer: Our roundup of the best tax tips for Canadians
Get your T4, T4A and T4E forms together
As part of your tax filing prep, you’ll need to get your T4, T4A and/or T4E forms in order. These government documents will help to determine your income. On your T4A, you can also see how much you’ve saved for retirement throughout the year via your registered pension plan, if you opted to contribute.
“The T4, or Statement of Remuneration Paid, is a tax slip that employers issue to employees after each calendar year. It includes your earnings, deductions and tax paid so far. The T4A is another tax slip, issued by payers of other amounts related to employment (pension payments, annuities, self-employed commissions, retiring allowances, scholarships, bursaries, research grants, etc.).”
Learn more about these documents: What are T4, T4A, and T4E forms?
Interest payments: When to claim a tax deduction for your investments
Can you claim a deduction for the interest paid on money you’ve borrowed for investment purposes? You can for a mortgage on a rental property or a loan to purchase investments in non-registered accounts. Know, though, that there are restrictions:
“According to the Canada Revenue Agency (CRA), ‘most interest you pay on money you borrow for investment purposes [can be deducted] but generally only if you use it to try to earn investment income. … If the only earnings your investment can produce are capital gains, you cannot claim the interest you paid.’ … An example of when interest may not be tax deductible is when you buy land that does not produce rental income and can only produce capital gains. Buying a stock that has no history of paying dividends (or the class of shares does not allow dividends) is another potential example.”
More on claiming a deduction on interest payments: Are interest payments tax deductible?
Claims for COVID-related work expenses
Did you work from home at least some of the time this year? You can still claim a deduction for home office expenses.
“In 2020, eligible employees who worked remotely could deduct up to $400 in home expenses from their taxable income, without the need to keep receipts or get a signed T2200 form from their employer. The government has promised to extend the simplified deduction through the 2022 tax year, and to increase the allowable amount to $500.”