The world changed after the pandemic in many ways. One of those ways is through inflation, pushing prices through the roof and causing many Canadians to not have as much cash in their pockets. Because of this, it’s time for Canadians to make the government work for them.
The good news is that it is already working for us — literally, but also in terms of benefits and credits. Yet many Canadians don’t realize all the benefits and credits they can claim, mainly because they change all the time.
Today, let’s look at just a few of these benefits. Those that come down to another pandemic-led shift. The benefits that come from working from home.
COVID brought it on
The working-from-home benefits came directly as a result of the pandemic. If you had to spend more than 50% of your time working from home during at least four consecutive weeks in the years 2020, 2021, or 2022 because of COVID-19, you could claim $2 per day. This was the temporary flat-rate method at the time for claiming home office expenses.
The maximum for this method was bringing in $400 from 200 working days in 2020 and up to $500 for 250 working days in 2021 and 2022. But here’s the thing. If you were claiming these benefits before and are still working from home in 2023, there are other benefits you can claim!
Your home, your business
The Canada Revenue Agency (CRA) states that if your home is your principal place of business or you use the space only to earn your business income, “and you use it on a regular and ongoing basis to meet your clients, customers, or patients,” you can claim business-use-of-home expenses.
The benefit of this credit is that you can claim it even if you use the space for personal use or even if you rent your home. And there are quite a few expenses that can be taken off in this method.
Employees can deduct maintenance costs such as heating, home insurance (not your mortgage, but mortgage interest), electricity, and even cleaning materials. You’ll need to know the area of your workspace, as well as how many hours you use the space per week.
It can get quite complicated, which is why it’s always advisable to use a financial advisor or tax consultant. But I can assure you, it’s worth it.
Where to put that cash
Now, the thing here is that you’re not exactly getting payments month after month. Instead, this benefit comes as potentially a refund or a credit on your tax return. But if you gain that refund, it could be quite a large amount!
With that, don’t put it to waste and instead invest it back into your own pocket. Put it aside in something safe, such as a Canadian Big Six bank, and you’re sure to see it climb back from today’s share price. For example, Bank of Montreal (TSX:BMO) would be a strong choice right now. It offers growth after its expansion into more of the United States. Also, it offers the most exchange-traded funds (ETF) on the market. This is a huge benefit in a volatile market.
Furthermore, you can grab a dividend yield of 5.41% as of writing. That’s even more income to grab onto while you wait for shares to return to 52-week highs, which should occur in the next year. So, don’t wait. Get what’s owed to you and grab whatever you can from these CRA benefits.
