TurboTax Canada – Common expenses to claim for gig-economy
The following article is in partnership with TurboTax Canada. All thoughts and opinions are my own.
With so many changes in our economy over the last year or so, I thought I would highlight some common expenses to claim for the gig-economy this tax season.
Read on for tips and tricks thanks to my partnership with TurboTax Canada this tax filing season and just as importantly, enter below for your chance to win 1 of 3 TurboTax Canada online software promotional codes to help you with your 2021 tax year tax filing needs.
Enter to win of course but even if you don’t win, please do take advantage of my juicy 15% discount on TurboTax Canada tax preparation software.
My promotion is available until May 2, 2022 below!
Why TurboTax Canada – common expenses to claim for the gig-economy and more!
Raise your hand if you keep on top of our Canadian tax system changes line-by-line when you’re getting ready to file?!
Ya, I thought so!!
I mean, while it’s very important stuff the tax documentation and guidance provided by our Canada Revenue Agency (CRA) can be very dry and very confusing reading material.
I mean, just look at this stuff???
Reference CRA, Guide T4002 – T4002 Self-employed Business, Professional, Commission, Farming, and Fishing Income.
I can appreciate doing your own taxes might be intimidating, especially trying to navigate just some of that CRA guidance above but whether you’re now employed in the gig-economy, you incurred a major life change in 2021, or even if you’ve been self-employed for years, I’ve found that using TurboTax simplifies the tax filing process in all these cases and more.
In the software, I love the series of plain-language questions and I like the fact they have designed-in support if and when you need it, whereby you can get in touch with a tax expert on demand.
I know these features are available because I’ve used TurboTax for years and I’ll do that again for the 2021 tax filing year for my personal taxes.
What’s new in TurboTax?
Before you launch into your tax filing work for 2021, you’ll want to know what is new or different for this year – as you gather your tax filing documentation and records.
TurboTax COVID-19 tax information
Here’s some info on common ways that COVID-19 may have impacted your tax situation this year:
- COVID-19 benefit repayment – If you repaid all or part of COVID-19 benefits received in 2020 or 2021, you’re able to choose the year to deduct the repayment amount. You should receive a slip reporting repaid amounts for EI (T4E) as well as CERB, CRB, CRCB, and CRSB benefits (T4A). These amounts can be imported through Auto-fill my return or entered manually in the Income section.
- Work-from-home expenses – If you had to work from home due to COVID-19 closures in 2021, you’re able to make claims in the Employment Expenses section on forms T777 or T777S, under *the same rules introduced in 2020 but the claims limit has increased. TurboTax software includes a simple prompt to claim $500 for this 2021 tax year so you don’t even have to worry how to complete the T777 or T777S form via this *temporary flat method.
*This method simplifies your claim for home office expenses (work-space-in-the-home expenses and office supply and phone expenses). If you worked more than 50% of the time from home for a period of at least four consecutive weeks in the year due to the COVID-19 pandemic, you can claim $2 for each day you worked from home during that period. You can then also claim any additional days you worked at home in the year due to the COVID-19 pandemic. The maximum amount that can be claimed is $400 per individual in 2020 and $500 per individual in 2021 and in 2022. This method can only be used for the 2020, 2021 and 2022 tax years.
Changes – embedded in the TurboTax software for easy prompt completion
Here are a few federal tax changes to look out for this year:
- Disability Tax Credit – The eligibility requirements for this non-refundable credit have expanded to include an updated list of mental functions of everyday life, a longer list of activities in determining time spent on life-sustaining therapy and reducing the minimum required frequency of therapy.
- Northern Residents Deduction – The travel component of the Northern Residents Deduction has been made available to residents with no employer benefits.
- Eligible educator school supply tax credit – Beginning in 2021, the eligible educator school supply tax credit has increased to $250 from $150.
- RRSP Limit Calculation – Postdoctoral Fellowship Income will now be considered earned income for RRSP. Taxpayers are allowed to adjust 10 years back.
- Canada Workers Benefit – The Canada Workers Benefit has been updated with increased amounts and will now be available to more individuals. Also, the secondary earner exemption was introduced for individuals with an eligible spouse.
Beyond some federal changes above, depending on the province you live in, other changes may apply to you based on your province of residence – but don’t worry, the software will help with all of this!
- The Seniors’ Home Safety Tax Credit – This new credit supports seniors in making their homes safer and more accessible, with a credit of 25% up to a max $10,000 in eligible expenses.
- Childcare Access and Relief from Expenses (CARE) Tax Credit – For tax year 2021 this credit will be increased by 20%.
- Temporary Ontario Jobs Training Tax Credit – This new credit allows individuals to claim 50% of eligible expenses for 2021 to a max credit of $2,000.
- Ontario Apprenticeship Training Tax Credit – This credit has expired for tax year 2021.
- Federal fuel charge proceeds – Beginning in the 2021 tax year, federal fuel charge proceeds will be made available in the form of a refundable tax credit to individuals who earn farming income and whose total farming expenses incurred are at least $25,000.
And, finally folks, as of this tax year, the Climate Action Incentive will no longer be paid as part of your tax return. If you’re eligible based on the new requirements, you’ll receive a quarterly payment directly from CRA (similar to quarterly Canada Child Benefits (CCB) and GST/HST payments).
What’s new with TurboTax Canada – common expenses to claim for the gig-economy
Needless to say, the ongoing pandemic might have triggered your hobby to become your new main job or even if you didn’t change full-time jobs in 2021, maybe you’ve started to think about your side-hustle as an additional income stream for you or your family – and last year was the year to do it.
This makes accounting for any self-employment deductions – critical.
I like that TurboTax walks you through some key prompts step-by-step, so you never miss a valuable deduction or credit. As a past home-based business owner myself (I’m now incorporated), there are some common expenses I used to deduct from my income every year.
Some of these might even apply to you:
- Business travel
- Meals & entertainment
- Training courses – to improve your business operations or services
- Association membership fees
- Business licenses & permits – don’t forget to claim any hosting fees!
- Marketing expenses
- Business-at-home expenses (including but not limited to a portion of your utilities, property
- taxes and more!)
And, if for whatever reason you are unsure about a deduction or credit, consider a tax expert review your tax return before you file it.
Using TurboTax Live Assist & Review:
- You can ask questions and get advice about your taxes from a real tax expert,
- Your expert will review your return, and
- You can get on-demand assistance when you need it.
Beyond that feature, check out TurboTax Live Full Service:
- After answering a few questions, you authorize an expert to get your tax documents directly from Canada Revenue Agency (CRA),
- The TurboTax expert will do the tax-filing lifting for you, they ensure your credits and deductions are checked, and
- After a review over the phone, before they EFILE your tax return for you, they’ll walk you through everything they have done!
Don’t forget, they have an app for that!
File with confidence and learn about other features for 2021
I got the chance to speak with some TurboTax representatives recently, and I asked them the following:
Beyond what I mentioned above, what reminders or features could help users with their tax filing needs for the gig-economy? What might be some other key deductions or credits for the 2021 tax year?
This is a great time to remind filers that gig-economy workers need to report their business income and expenses like everyone else: whether that’s a side-gig or a big business, that is income that must be declared. It is important to track all income and expenses for your business to ensure it is reported properly.
There are many types of eligible business expenses, and these depend on the business themselves. Tax filers should consider common expenses like office supplies, telephone, and salaries, however they are many more that could apply to your business.
As you highlighted above, as a sole proprietor, you report your business income on the T2125 form, as part of your T1 General form.
What if users are unsure about something, do they still get a guarantee for 2021 tax filing needs?
Of course, Mark!
Yes, as always, TurboTax offers an accuracy guarantee. We are the most used tax software in Canada and are certified by the CRA. Our prompts are designed to ensure the tax filing process for any user removes any errors or omissions.
In fact, there are an entire sub-process just before you file your taxes to review everything in detail. Any user can also take advantage of TurboTax Live Assist & Review or TurboTax Live Full Service just in case!
TurboTax Canada – Common expenses to claim for gig-economy summary
A big thanks to my partners, Intuit Canada and TurboTax Canada for their generous giveaway.
I will draw three (3) Canadian resident names at random and that’s it – that’s how you can win!
I will be drawing the winning names in a few short weeks for the online codes.
Good luck and thanks for your readership!
Disclosure: Images above provided by Intuit Canada. All thoughts and opinions are my own. All tax-related information deemed current at time of writing. My Own Advisor is not a tax expert, and I encourage you to seek out the advice of a tax accountant when it doubt. Codes are for online / cloud-based version. Codes not for in-store purchase. Codes not for downloadable versions.
These are some great tax tips to consider – including a major 30% My Own Advisor discount for The Grumpy Accountant tax book for any support this tax season and beyond.