Transcript: Filing Taxes in Pandemic | Apr 28, 2021

Steve sits in a room with white walls, a low slanted ceiling and several framed pictures on the walls including one of Walter Kronkite. He's slim, clean-shaven, in his fifties, with short curly brown hair. He's wearing a white shirt and a black tie.

A caption on screen reads "Filing taxes in a pandemic."

Steve says FOR MANY, DOING THEIR TAXES OFTEN SLIDES TO THE BOTTOM OF THE TO-DO LIST, UNTIL JUST ABOUT THIS WEEK, BECAUSE THE DEADLINE IS THIS FRIDAY. AND GIVEN THE ECONOMIC CATASTROPHE OF THE PANDEMIC, THE JOB THIS YEAR COULD BE TOUGHER THAN USUAL. WITH US TO HELP: IN THE WYCHWOOD BARNS NEIGHBOURHOOD OF THE PROVINCIAL CAPITAL: THERE'S JACKIE PORTER, CERTIFIED FINANCIAL PLANNER WITH CARTE WEALTH MANAGEMENT...

Jackie is in her forties, with short curly black hair. She's wearing glasses, a black sweater and a blue and green patterned scarf.

Steve continues JACKIE, IT'S GOOD TO HAVE YOU BACK ON THE PROGRAM. HOW ARE YOU MANAGING?

Jackie says I'M DOING PRETTY GOOD ALL THINGS CONSIDERED, STEVE.

Steve says THAT IS THE LINE PEOPLE USE, RIGHT? AS WELL AS POSSIBLE UNDER THE CIRCUMSTANCES. I GET YOU. SO WE'RE VERY CLOSE TO THE PERSONAL INCOME TAX FILING DEADLINE, OF COURSE APRIL 30TH. TELL US IN YOUR VIEW WHAT THE MOST SUBSTANTIAL CHANGE THIS YEAR FOR PERSONAL INCOME TAXES IS COMPARED TO OTHER YEARS?

The caption changes to "Jacqueline Porter. Carte Wealth Management."

Jackie says YOU KNOW, I THINK WE CAN ALL AGREE THAT 2020 WAS ONE OF THOSE VOLATILE... ONE OF THE MOST VOLATILE YEARS WE'VE SEEN. THAT'S NEVER BEEN MORE TRUE THAN IT'S BEEN FOR PEOPLE WHO WERE GETTING CASH FLOW. BECAUSE, UNFORTUNATELY, CASH FLOW CAME TO A SCREECHING HALT FOR A LOT OF INDIVIDUALS IN 2020 WHO ARE JUST KIND OF DOING THEIR THING, AND I THINK THAT'S PROBABLY THE BIGGEST ISSUE BECAUSE THE PANDEMIC AFFECTED SO MANY TYPES OF BUSINESSES, ESPECIALLY CERTAIN INDUSTRIES WHERE ALL OF A SUDDEN THEY LOST INCOME AND REALLY GOT INTO A SCENARIO WHERE THEY WERE LOSING INCOME AND HAD TO RELY ON ALL THE GOVERNMENT PROGRAMS THAT WERE BEING INTRODUCED. SO I THINK FOR PEOPLE, INDIVIDUALS, WHO LOST INCOME FROM THEIR EMPLOYERS, THEY STARTED TO RELY ON CERB, BUSINESS OWNERS STARTED TO RELY ON THE MYRIAD... THERE ARE SO MANY DIFFERENT GOVERNMENT PROGRAMS THAT THEY HAD TO PIVOT TO IN ORDER TO KEEP, YOU KNOW, THEIR FINANCIAL LIFE AFLOAT. SO I THINK THAT'S REALLY SOMETHING THAT BUSINESS OWNERS STRUGGLED WITH... AND STILL ARE STRUGGLING WITH.

Steve says BECAUSE OF THE PANDEMIC, OF COURSE, GOVERNMENTS AT ALL LEVELS HAVE GIVEN US EXTENSIONS ON DOING THINGS LIKE PAYING MUNICIPAL TAXES OR RENEWING OUR DRIVER'S LICENCES. ANY INDICATION WHETHER OR NOT THEY'RE GOING TO EXTEND THE DEADLINE FOR US FILING OUR TAXES?

Jackie says YOU KNOW, GOVERNMENTS ARE IN THE RED AS FAR AS THEIR BALANCE SHEET. SO I DON'T THINK THEY HAVE AN APPETITE FOR EXTENDING THE DEADLINE, LIKE THEY DID LAST YEAR WHEN THERE WAS SO MUCH MORE... SO MANY MORE UNKNOWNS, AND I THINK THEY WERE MORE WILLING TO GIVE PEOPLE A BREAK BECAUSE THEY HAD A LITTLE BIT MORE MONEY IN THEIR COFFERS. SO THE FILING DEADLINE FOR THOSE OF YOU WHO ARE STILL WAITING IS APRIL 30TH. AND THE ONLY THING THEY'VE SAID, STEVE, IS THEY ARE WILLING FOR, FOR PEOPLE WHO TOOK ADVANTAGE OF THE PROGRAMS, SO ALL OF THE SUBSIDY PROGRAMS I'VE JUST TALKED ABOUT, AND WHO EARNED 75,000 dollars OR LESS, THEY WOULD BE WILLING TO GIVE THEM AN EXTENSION ON PAYING TAXES. SO THEY CAN CHECK WITH THEIR ACCOUNTANT AND, YOU KNOW, SEE IF THEY QUALIFY BASED ON THEIR TAXABLE INCOME, WHETHER THEY'VE SHOWN WHETHER OR NOT THEY'D BE ABLE TO GET AN EXTENSION TO PAY.

Steve says LET ME FOLLOW UP ON THAT. I THINK THERE ARE GOING TO BE A LOT OF PEOPLE WITH SOME QUESTIONS AROUND THAT. FOR EXAMPLE, THE CERB. DO YOU HAVE TO PAY TAX ON THAT INCOME? OR THE PAGE TOP-UP? DO YOU HAVE TO PAY TAX ON THAT INCOME? WHAT'S THE RULE THERE?

Jackie says YOU KNOW... YES, YOU DO. THE SHORT, QUICK ANSWER IS, YES, EXPECT TO PAY TAXES BECAUSE, YOU KNOW, AT THE TIME WHEN WE WERE ALL GETTING THESE BENEFITS, WE WERE JUST HAPPY TO GET THEM TO USE THEM TO BE ABLE TO PAY OUR BILLS. FOR A LOT OF PEOPLE, AND THIS IS SOMETHING TO WATCH, IS IF YOU DIDN'T MAKE INCOME INITIALLY WHEN CERB HIT BUT THEN LATER ON YOUR BUSINESS STARTED TO PICK UP, YOU MIGHT HAVE BEEN PAYING TAXES ON YOUR BUSINESS INCOME, OR INCOME YOU EARNED FROM YOUR SALARY. BUT IF YOU ADD WHAT YOU GOT FROM CERB AND WHAT YOU MADE OTHERWISE, THERE'S GOING TO BE ADDITIONAL TAXES TO PAY ALONG WITH THE TAXES THAT WOULD BE OWED ON THESE PROGRAMS. SO DEFINITELY DO THE MATH AND FIND OUT WHERE YOU STAND WHEN IT COMES TO OWING. THAT'S JUST YET ANOTHER STRESS THAT PEOPLE HAD TO DEAL WITH DURING THE PANDEMIC ALONG WITH WORRYING ABOUT CASH FLOW IS WORRYING ABOUT WHETHER OR NOT THEY WERE GOING TO HAVE TO PAY SOME OF THESE PROGRAMS BACK THIS TAX YEAR OR IN FUTURE TAX YEARS.

Steve says LET ME DO ANOTHER FOLLOW-UP BUSINESS-RELATED THIS TIME. THERE ARE MANY PEOPLE WHO OVER THE PAST YEAR AND CHANGE HAVE, WHATEVER THEIR OCCUPATION WAS BEFOREHAND AND IF THEY DID IT OUTSIDE THEIR HOME, THAT WAS ONE THING. MANY OF THEM ARE NOW WORKING OUT OF THE HOUSE. DOES THAT MEAN THAT THEY NOW HAVE POTENTIAL TAX WRITE-OFFS FROM WORKING AT HOME THAT THEY DIDN'T HAVE BEFORE THAT THEY SHOULD BE LOOKING INTO NOW?

Jackie says YES. THERE'S FINALLY SOME GOOD NEWS. THANK YOU FOR ASKING ABOUT THAT, STEVE. I FEEL LIKE I KEEP GIVING BAD NEWS TO PEOPLE THIS YEAR. YOU CAN CLAIM ACTUALLY UNDER THE HOME OFFICE WRITE-OFF, YOU CAN CLAIM UP TO 400 dollars OF DEDUCTIONS ON YOUR INCOME TAXES FOR THIS YEAR IF YOU WERE WORKING FROM HOME. I BELIEVE IT ADDS UP TO 2 dollars A DAY. BUT THE MAX DEDUCTION, ESPECIALLY FOR THOSE OF YOU WHO AREN'T ORGANIZED AROUND KEEPING TRACK OF ALL YOUR EXPENSES WITH THE HOME OFFICE DEDUCTION, YOU CAN WRITE OFF UP TO 400 dollars OF EXPENSES FOR YOUR WORKING-FROM-HOME EXPENSES. BUT GOVERNMENT HAS A SECONDARY PROGRAM THAT IF YOU RENTED OUT SPACE, LIKE YOUR OFFICE SPACE, AND YOU RENTED OUT YOUR HOME OFFICE SPACE JUST BECAUSE OF NOT BEING ABLE TO USE IT DURING THE PANDEMIC, THERE ARE ADDITIONAL EXPENSES YOU CAN QUALIFY FOR. YOU JUST HAVE TO HAVE ALL OF THE RECEIPTS ASSOCIATED WITH IT. SO, AGAIN, THIS IS A GREAT OPPORTUNITY TO ASK YOUR ACCOUNTANT IF YOU'VE BEEN ORGANIZED, KEEPING ALL OF YOUR TAX RECEIPTS, TO MAKE SURE YOU CAN CLAIM EVERY PENNY THAT YOU'RE ENTITLED TO. BECAUSE IT'S A BIGGER TAX BENEFIT IF YOU'RE ORGANIZED.

Steve says MM-HMM.

Jackie says BUT 400 IF YOU'RE NOT.

Steve says 400 IF YOU'RE NOT. IF YOU RUN A SOLE PROPRIETORSHIP, I GATHER THEY DON'T HAVE TO FILE UNTIL JUNE. ARE THERE ANY NEW BUSINESS WRITE-OFFS AS A RESULT OF THE PANDEMIC THAT THESE FOLKS OUGHT TO BE CONSIDERING?

Jackie says YES. SO JUNE 15TH... THANK YOU FOR POINTING THAT OUT... IS THE TAX DEADLINE. AND THAT HASN'T BEEN EXTENDED EITHER, FOLKS, SO DON'T GET TOO EXCITED. I DON'T THINK THEY WILL. THE GOVERNMENT IS LOOKING FOR YOUR MONEY SOONER THAN LATER. YOU HAVE AN ADDITIONAL TAX PROGRAM, A DEDUCTION THAT YOU CAN CLAIM THIS YEAR. I'M HAPPY TO REPORT YOU CAN WRITE OFF SUBSCRIPTIONS. SO BUSINESS SUBSCRIPTIONS FOR NEWS MAGAZINES OR NEWSPAPERS YOU'D NORMALLY HAVE SUBSCRIBED TO. YOU DO GET AN ADDITIONAL TAX WRITE-OFF OF 500 dollars THAT YOU CAN CLAIM. SO THAT IF YOU, LIKE ME, HAD NEWSPAPERS OR MAGAZINES COLLECTING DUST IN YOUR OFFICE, YOU CAN NOW SUBSCRIBE FOR AN ONLINE NEWS MAGAZINE OR ONLINE SUBSCRIPTION AND YOU'RE ABLE TO WRITE OFF UP TO 500 dollars AS AN EXPENSE.

Steve says THESE ARE ALL LEGITIMATE TAX WRITE-OFFS.

Jackie says 100 percent.

Steve says 100 percent. OKAY. IF YOU HAVE A BUSINESS, IS IT IMPORTANT THAT YOU PAY YOURSELF A SALARY?

The caption changes to "Jacqueline Porter, @jackieportercfp."

Jackie says THIS IS A HUGE THING. I'M ALWAYS TALKING TO MY SELF-EMPLOYED CLIENTS ABOUT. IT'S NICE TO NOT PAY TAXES, STEVE, BUT THEN WHAT'S THE COST OF NOT TAKING A SALARY? THE BIGGEST ONE IS, IF YOU DON'T TAKE A SALARY, YOU CAN'T APPLY FOR THINGS LIKE A MORTGAGE OR EVEN OPPORTUNITIES TO GROW YOUR BUSINESS BECAUSE YOU NEED TO SHOW THE GOVERNMENT THAT YOU'RE EARNING A RELIABLE INCOME FROM YOUR BUSINESS. YOU ALSO HAVE A SCENARIO WHERE THIS YEAR, IF YOU DIDN'T ACTUALLY SHOW ANY INCOME FROM YOUR BUSINESS, HOW COULD THE GOVERNMENT REIMBURSE YOU OR GIVE YOU ACCESS TO THESE ASSISTANCE PROGRAMS? IF THEY CAN'T SHOW THAT YOU'VE HAD ANY LOSS OF INCOME. SO IF YOU DIDN'T SHOW AN INCOME FROM YOUR BUSINESS, YOU WOULD HAVE LOST OUT IN 2020, A YEAR THAT WOULD HAVE BEEN SO CRUCIAL TO HAVE ACCESS TO GOVERNMENT ASSISTANCE PROGRAMS AND MAY BE THE LIFEBLOOD OF YOUR BUSINESS IN 2020. YOU WOULD HAVE LOST OUT ON BEING ABLE TO CLAIM OR ACCESS ANY OF THE CERB PROGRAMS, ANY OF THE WAGE SUBSIDY PROGRAMS, THE CANADA BUSINESS... EMERGENCY BUSINESS ACCOUNT. THESE WERE VITAL PROGRAMS THAT HAVE KEPT BUSINESS ALIVE DURING THE PANDEMIC. SO DEFINITELY IMPORTANT TO SHOW SOME SALARIED INCOME. ANOTHER REASON THAT YOU MAY WANT TO CONSIDER DOING THAT IS TO ACTUALLY SET UP THINGS LIKE RRSPs. RRSPs ARE BASED ON YOUR EARNED INCOME FROM THE PREVIOUS YEARS. SO IF YOU'RE TRYING TO DIVERSIFY YOUR STREAMS OF INCOME AWAY FROM YOUR BUSINESS, YOU WOULD NOT BE ABLE TO INVEST IN THINGS LIKE RRSPs AS WELL.

Steve says I SHOULD ASK YOU SORT OF THE FLIP SIDE OF THAT QUESTION, WHICH IS: WHAT WOULD BE THE LOGICAL EXPLANATION FOR WHY SOMEBODY WHO OWNED THEIR OWN BUSINESS WOULD NOT WANT TO PAY THEMSELVES A SALARY?

Jackie says YOU KNOW, BECAUSE THEY'RE THINKING, I DON'T WANT TO PAY TAXES. I MEAN, THAT'S A REALLY BIG MOTIVATION. SOMETIMES BUSINESSES ARE TAKING DIVIDEND INCOME FROM THEIR BUSINESS, WHICH GIVES THEM THE DIVIDEND TAX CREDIT. SO, YOU KNOW, SOMETIMES THEIR ACCOUNTANT MIGHT ADVISE FROM A TAX-PLANNING PERSPECTIVE THAT THAT MIGHT BE A ADVANTAGEOUS THING TO DO OR TAKE NO SALARY OR THEY MIGHT NOT BE ABLE TO AFFORD YOU. MAYBE THEY'RE NOT ABLE TO AFFORD TO TAKE A SALARY FROM THEIR BUSINESS, WHICH IS ALSO AN ISSUE, RIGHT? BECAUSE YOU KIND OF WANT TO, IN ORDER TO RUN FINANCIAL STATEMENTS AND SEE HOW YOUR BUSINESS IS DOING IS TO TAKE A SALARY FROM YOUR BUSINESS AND INCREASE THAT AND TO GET A SENSE OF THE OVERALL FINANCIAL HEALTH OF YOUR BUSINESS. SO, YOU KNOW, FROM A TAX-PLANNING PERSPECTIVE, YOU KNOW, THERE'S OPPORTUNITIES TO REDUCE YOUR TAXES OUTSIDE OF JUST, YOU KNOW, TAKING A DIVIDEND INCOME. IN FACT, A NUMBER OF PROVINCES, LIKE ONTARIO, HAVE TAKEN AWAY SOME OF THE BENEFITS OF CLAIMING JUST DIVIDEND INCOME AND MAKING... TAKING A SALARY AND TAKING DIVIDEND INCOME ALMOST EQUAL. SO THERE'S NOT AS MANY INCENTIVES, ESPECIALLY FROM 2021 ON, TO JUST TAKE INCOME FROM DIVIDENDS.

Steve says GOTCHA. NOW, JACKIE, I WANT TO... I WANT TO CIRCLE BACK TO AN EXAMPLE YOU GAVE JUST A FEW MOMENTS AGO WHERE YOU TALKED ABOUT A BUSINESS THAT MIGHT HAVE BEEN IN GRAVE DIFFICULTY AT THE BEGINNING OF THE PANDEMIC BUT THEN, FOR WHATEVER REASON, THEY'VE PIVOTED, THEY'VE FIGURED IT OUT, THE BUSINESS CAME ROARING BACK, CASH FLOW WAS GOOD, BUT MAYBE THEY HAD LOANS THAT THEY HAD TO PAY OFF OR, YOU KNOW, OTHER OBLIGATIONS THEY HAD TO DEAL WITH, AND AS A RESULT THEY'RE CASH-POOR RIGHT NOW AND YET, YOU KNOW, HERE COMES THE TAX MAN WITH A BILL. IF YOU'RE IN THAT PREDICAMENT AND THE BANK ACCOUNT IS EMPTY BUT YOU OWE, WHAT DO YOU DO?

Jackie says YOU TRY TO GET AHEAD OF THAT. FIRST OF ALL, AGAIN, IN CONVERSATION WITH YOUR ACCOUNTANT. SO WHAT'S THE DAMAGE GOING TO BE? IF I OWE, HOW MUCH TIME WILL I NEED TO PAY THAT... YOU CAN POTENTIALLY FIGURE OUT, JUST HAVING A SENSE THAT THE BUSINESS ISN'T DOING WELL NOW. WELL, THEN GET YOUR ACCOUNTANT TO REACH OUT TO CRA. THEY ARE LOOKING AT EACH AND EVERY PERSON'S CIRCUMSTANCES, AND BASED ON YOUR FINANCIAL HARDSHIP, YOU CAN GET AN EXTENSION TO PAY YOUR TAX BILL. SO GET AHEAD OF IT. TALK TO YOUR ACCOUNTANT. HAVE THEM REACH OUT TO CRA TO MAKE PAYMENT ARRANGEMENTS. THEY ARE WILLING TO LOOK AT THAT BASED ON YOUR FINANCIAL CIRCUMSTANCES.

Steve says DOES MUCH OF THAT HAPPEN?

Jackie says YEAH. OH, YEAH. THIS YEAR IN PARTICULAR. I THINK CRA IS OPEN, BUT THEY DO WANT SOME KIND OF A RETAINMENT PLAN IN PLACE. THE WORST THING YOU CAN DO IS JUST NOT DEAL WITH IT AND HAVE THEM COME AFTER YOU. BECAUSE THEY CERTAINLY CAN. PEOPLE DON'T REALIZE THAT WHEN THEY PAY THEIR TAXES, THE GOVERNMENT HAS ACCESS TO YOUR BANK ACCOUNT. IF YOU DON'T FILE YOUR TAXES AND YOU OWE AND THEY KNOW YOU CAN OWE, THEY CAN SIMPLY SEND YOUR BANK A DEMAND LETTER AND START TO COME UP WITH THEIR OWN REPAYMENT PLAN AND TAKE THAT MONEY OUT OF YOUR ACCOUNT. SO GET AHEAD OF IT. TALK TO THE GOVERNMENT DIRECTLY, IF YOU DON'T HAVE AN ACCOUNTANT, OR TALK TO YOUR ACCOUNTANT, WORK SOMETHING OUT. YOU KNOW, THEY CAN DO THE MATH AND LOOK AT YOUR FINANCIAL SCENARIO JUST AS WELL AS YOU CAN AND SEE IF THERE'S NO MONEY AVAILABLE TO PAY. AND, YOU KNOW, THE REALITY IS JUST COMING UP WITH WHAT'S A REASONABLE SCENARIO FOR YOU TO BE IN IN ORDER TO PAY IT. MAYBE IT'S SIX MONTHS. BUT PAYING SOMETHING IS BETTER THAN PAYING NOTHING.

Steve says SO CLOSING YOUR EYES AND HIDING UNDER THE COVERS IS NOT A GOOD STRATEGY; IS THAT WHAT YOU'RE SAYING?

Jackie says YEAH. THEY'LL COME FIND YOU. THEY KNOW WHERE YOU LIVE.

Steve says THEY KNOW WHERE WE ARE. OKAY.

Jackie says AND THEY KNOW WHERE YOUR MONEY IS.

Steve says YEAH, THAT'S FOR SURE. IN OUR LAST MINUTE AND CHANGE HERE, LET'S DO ONE LAST THING HERE. I'M SURE THERE ARE PEOPLE WATCHING THIS RIGHT NOW OR LISTENING ON PODCAST WHO FIND THIS A BIT OVERWHELMING AND MAYBE THEY DON'T HAVE... I NOTICE YOUR ADVICE ON MANY OCCASIONS TONIGHT HAS BEEN, THAT YOU HAVE A CHARTERED ACCOUNTANT, MANY DON'T HAVE AN ACCOUNTANT. WHAT'S YOUR ADVICE?

Jackie says THERE ARE A LOT OF TAX CLINICS AVAILABLE. GOOGLE TAX CLINICS IN YOUR AREA BECAUSE YOU CAN GET VOLUNTEERS TO HELP YOU FILE YOUR INCOME TAXES. SO IF YOU'RE, AGAIN, IN A SCENARIO WHERE YOUR INCOME IS LOW OR YOU'RE IN FINANCIAL HARDSHIP, THERE ARE ORGANIZATIONS AVAILABLE OUT THERE WHO WILL HELP YOU TO FILE YOUR TAXES. THE OTHER THING I WAS GOING TO SAY IS, FOR THOSE OF YOU WHO HAVE FAIRLY STRAIGHTFORWARD TAX RETURNS TO FILE, THERE'S U-FILE AND e-FILE THAT THE GOVERNMENTS ALLOWS YOU TO DOWNLOAD, THE SOFTWARE THEY ALLOW YOU TO DOWNLOAD, AND YOU CAN FILE YOURSELF AND THERE ARE PROMPTS TO GIVE YOU OPPORTUNITIES TO REDUCE YOUR INCOME TAXES. THEY'LL TELL YOU ABOUT SOME OF THE PROGRAMS AVAILABLE AND PROMPT YOU TO APPLY FOR THOSE CREDITS ONLINE. AND YOU CAN FILE YOUR TAXES THAT WAY AS WELL.

Steve says GREAT...

Jackie says JUST TAKE ACTION.

The caption changes to "Producer: Meredith Martin, @MeredithMartin."

Steve says TAKE ACTION IS ALWAYS THE BEST PLAN. JACKIE PORTER, CERTIFIED FINANCIAL PLANNER, REALLY GOOD OF YOU TO SPEND TIME WITH US ON TVO TONIGHT. MANY THANKS.

Jackie says A PLEASURE, STEVE. SEE YOU SOON. THANKS AGAIN.

Watch: Filing Taxes in Pandemic