Vince Lannello Talks Top Tax Considerations for Small Businesses in the New Year

As the tax filing year approaches, Vince Iannello shares tips for small businesses preparing to file.

While the upcoming tax filing season is a bit more straightforward than 2021 due to the ongoing nature of the pandemic response, it still brings special considerations for small businesses ready to maximize their tax filings and ensure all requirements are met.

Chartered accountant Vince Iannello says there are a few essential points small businesses and the work-from-home set can examine now to get a head start.

Vince Iannello notes the new tax filing deadline.

For 2021 tax filing in Canada, the traditional April 30 deadline falls on a weekend, necessitating an extension for filing until May 2, 2022, for standard returns, according to Vince Iannello. If you own a small business and are self-employed, you still have until June 15, 2022, to file self-employment returns, but your payment of any tax due is pushed from the typical April 30 deadline to May 2. As usual, taxes owed are due at the standard deadline.

When to consult with a professional

It’s always a great idea to work with an accountant or tax professional when preparing a return, particularly if your business accessed new funding sources or programs during the COVID-19 pandemic and you are uncertain about tax implications. For example, many towns offered special rebates in addition to national programs, such as Newmarket offering a $1,000 water rebate for small businesses in 2021. Vince Iannello advises the tax requirements for each program can be different, making it essential to review all documentation to determine the tax liability.

Home office tax deductions for temporary work-from-home situations

A variety of unique home office tax deduction filing options started for the tax year 2020 remain in effect for the 2021 tax year. Vince Iannello reports eligibility basics of working from home at least half your working hours for four weeks in a row or more in the tax year. Full or part-time hours are eligible.

As for 2020 filings, your employer is still not required to present your information on the T2200 form. Instead, you use form T777S for claiming expenses via an easy flat-rate method. With the form, you are eligible to claim $2 per day up to $400 per tax year for your home office deduction. If both you and your partner work from home, each of you is eligible for the deduction up to the maximum, Vince Iannello states.