Personal Tax Returns
What information will Ritchie Shortt & Tully LLP require to prepare my personal tax returns?
We send our clients the following letter and attachments. If you have misplaced your copy or have just become a client of Ritchie Shortt & Tully LLP, a copy of the letter and attachment is available here: T1 Mailing Letter (pdf) and Personal Income Tax Questionnaire (pdf). These are required for your personal tax return.
If you require us to report your business or professional activities please use our Business and Professional Activities Worksheet (pdf) You can print it out and fill it in. Additional information (T2125) in Part 2 of Form T2125 must be reported in 2020 if you earn income from your webpages or websites. You must also report the exact or estimated percentage of income generated from the Internet. Please see the details here: T1 Internet-Business-Activities. If you require us to report your rental income, please complete the rental summary: Real Estate Rentals Worksheet (pdf). You may also find some of our excel worksheets helpful in summarizing your information. These can be found in Calculation Tools under the Resources section of the website.
We will also need to know if you owned specified foreign property in excess of $100,000 CDN. Form T1135 (pdf), is the Foreign Income Verification Statement that must be filed. The CRA has implemented changes to Form T1135 for the 2015 and subsequent tax years. The changes will allow taxpayers, who held specified foreign property with a total cost amount of less than $250,000, throughout the year, to report under a new simplified reporting method rather than providing the detail of each such property. The current detailed reporting method will continue to apply to those taxpayers who, at any time during a year, held specified foreign property with a total cost of $250,000 or more. More information on foreign income verification.
To help you determine if you need to disclose your foreign holdings, please refer to pages 4 to 6 of the form to review the types of specified foreign property that must be included.
Work Space in the Home Expenses
If you were required to work from home due to COVID-19 during the 2020 tax year, you are entitled to make a claim for the work space use of your home. You can make a claim under the detailed method or the flat rate method. For more information on this deduction, please click here.
Canada Revenue Agency will soon stop mailing tax refunds and other benefits. We urge you to set up direct deposit at this time. This can be done online through “My Account” (if you are registered), by phone (call 1-800-959-8281) or at your financial institution. More information is available on CRAs website.
Canada Caregiver Amount
The Canada caregiver amount has replaced the family caregiver amount, the amount for infirm dependants age 18 or older, and the caregiver amount. You could be entitled to claim this amount in the calculation of certain non-refundable tax credits if the person you are making the claim for has an impairment in physical or mental functions. There is a $2,273 tax credit available to caregivers of infirm relatives including spouses, common-law partners and minor children. Find out more on Caregiver Credits.
Tuition, Education and Textbook Amounts
For 2019 federal tax purposes, the tuition credit is available; however, the education and textbook credit is no longer available. For 2019 Ontario tax purposes, the tuition and education and textbook credits are no longer available.
Reporting the sale of your principal residence for individuals (other than trusts)
When you sell your principal residence or when you are considered to have sold it, you must report the sale on your income tax and benefit return. Generally, you do not have to pay tax on any gain from the sale. This is the case if you are eligible for the full income tax exemption (principal residence exemption) because the property was your principal residence for every year you owned it.
You will be required to report basic information (date of acquisition, proceeds of disposition and description of the property) on your income tax and benefit return when you sell your principal residence to claim the full principal residence exemption. More information on the sale of principal residence.
Please note that if you own more than one property in any year (say your house and a cottage), then you can designate only one of those properties as your principal residence in any particular year. You may want to consult with us to ensure that you are making the optimum choice in claiming the principal residence exemption.