A Post Mortem on Tax Season 2022: Three Perspectives from the TAAG Team

June 18, 2022

With the 2022 tax season for individuals now officially over, and with June 15, 2022, as the deadline for sole proprietors to file their personal income tax returns, three members of the TAAG team gave their views on major issues that came up this year as well as advice on how tax season might be easier for our clients in 2023.

Simon, partner at TAAG, said his greatest concern was that many clients seem to have lost track of time, probably as a result of restrictions imposed by the Covid pandemic, including work-at-home and other work/life demands.

“I found that a lot of our clients mentioned feeling disorganized this year”, said Simon. “Many were missing some personal tax slips, were late submitting their information, and had to pay interest on outstanding balances as a result.” Part of the problem may have been that Easter was late this year. Many people wait until after the holiday to start focusing on their tax returns.

With respect to new issues that arose, Simon cited the problems that some people had, was with the Canada Emergency Response Benefit (CERB) which they had received at some point during the year. Some who had returned to work did not realize that there was a clawback on the benefit similar to the Old Age Security (OAS) benefit.

As for sole proprietors, Simon noted that some people have the misconception that their returns were due on June 15th. “While the filing is due June 15th, any amounts owing are normally due April 30th. The same goes for HST returns. Late payments accrue penalties and interest.”

In terms of how clients should prepare for next year’s tax season, Simon said, “Try to be more organized by having more open communication with your accountant. And think about filing your tax return as early as possible, at the beginning of March. Then we have more time to deal with any difficult issues.”

Gurek is the Senior Accountant at TAAG.

Gurek's main concerns are getting complete and accurate information from each client­­ based on their unique situations.

“For example,” says Gurek, “if you are selling or have sold a property during the year, have the sale documents available, as well as any renovation expenses. If you have foreign investments, make sure to have the year-end profit/loss statements.”

A number of Gurek’s clients are into cryptocurrencies “Make sure that you keep track of any transactions for tax purposes. It makes a difference in how we treat these new forms of assets for tax purposes. For example, are you running a business or simply acting as an investor? Other issues which can arise with cryptocurrencies are matters such as “air-drops” which are essentially a bonus (or dividend) for holding onto a certain cryptocurrency for a specified length of time.”

In terms of preparing for next year’s tax season, Gurek advises clients to keep detailed records of all transactions that take place during the year, as well as records of medical expenses, charitable donations, and other allowable deductions.

Gurek says that “there is a Google application that allows you to take a picture of each record and give it a number so you have complete information for next year’s tax return.”

Hamza is a partner at TAAG.

In terms of major issues that arose this year, Hamza mentions problems that some of his clients were having with RRSPs, especially with more complicated issues such as the treatment of government superannuation, and carrying forward unused contributions to future years. “A lot of people are not familiar with some of the more technical aspects of RRSPs, RIFs, and TFSAs. These details are important and can affect the amount of taxes you owe or the size of your refund.”

Another issue that came up was the dilemma of whether to incorporate a business or not. “This is a very important decision with considerable tax impact, both advantages and disadvantages,” said Hamza.

“The disposition of a principal residence or the change of use of a principal residence—such as converting it into a rental property or a B&B—also can be an issue. These types of decisions should be made in consultation with your accountant.”

As a final piece of advice, Hamza says, “Remember me every time there is a change in your life—when you buy a new house, when you have a new child or when you move to another province. All these changes affect your individual tax situation.”

If you have any questions about issues raised in this article or other tax concerns, please contact the team at TAAG.

Published by TAAG Corporation

© 2022 TAAG Corporation

Attribution-NoDerivatives 4.0 International (CC BY-ND 4.0)

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