2020 was a difficult year for everyone. The government and the CRA tried their best to help people through one of the most challenging financial years of their lives. One relief that the CRA offered to the people of Canada was delaying the tax deadline for the year. Since the pandemic disrupted the financial lives of millions of Canadians, the CRA gave everyone more time to get their finances in order.
Many people believe that it would have been better if the CRA had just canceled taxes for the year. But that would have been akin to turning off the big financial machine that is crucial to keep the country functioning. Besides, these taxes are partly why the government was able to start several benefit payments to keep people afloat when they lost their income.
One question that’s echoing in the minds of many people is, will the CRA change the tax deadline again in 2021?
2021 tax deadlines The CRA hasn’t made any formal announcements yet regarding the tax deadlines next year. The chances are that the deadlines might get delayed (otherwise, the gap between the tax deadlines of two consecutive years would be fewer than 12 months). Still, until the CRA explicitly announces a delay, we have to assume that the tax deadlines aren’t moved.
It means that you should start preparing as per the regular schedule. That would ensure that you are ready to file and pay your taxes, whether the deadlines are moved or not.
Don’t forget the deductions You can’t do much about the tax deadlines, but you can reduce your tax liability by getting all the deductions in. Based on your personal and financial circumstances, you might be eligible for several deductions and tax credits. And if you focus on them instead of the deadlines, you might be able to field a lighter tax bill, regardless of when you have to pay it to the CRA.
One deduction that’s open to every taxpayer RRSP contributions. Based on your income and how much you can contribute to the CRA, it can be a significant deduction. One good long-term stock you might want to consider adding to your RRSP is Telus (TSX:T)(NYSE:TU), one of the three telecom giants in the country.
Telus is a Dividend Aristocrat that’s currently offering a juicy 4.8% yield, but that alone isn’t the reason to keep this telecom giant in your RRSP. The company also has modest capital growth potential. Its 10-year CAGR (dividend adjusted) comes out to about 12.7%, a very decent number for long-term growth. And there are a few reasons to believe that the company might keep growing at a steady pace.
As the country’s banking sector, the telecom is also an oligopoly, and three key players dominate over 80% of the market. As one of these three major players, Telus face little to no danger of a significant competitor disrupting its market. The company is also well poised in the 5G space and has partnered with Samsung (KS:005930), Nokia (HE:NOKIA), and Ericsson (BS:ERICAs) for infrastructure.
Foolish takeaway Telus can be a powerful addition to your RRSP portfolio, especially if it can keep growing at an annualized rate of over 10%. And investing a significant amount in the company won’t just help with the size of the nest egg, but more contributions would also mean a lighter tax bill. That’s a major plus, regardless of whether the tax deadlines are moved or not.
The post Will the CRA Extend the Tax Deadline in 2021? appeared first on The Motley Fool Canada.
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends TELUS CORPORATION.
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