Narcity talked to Stefanie Ricchio, a CPA and spokesperson for TurboTax Canada, to find out what you need to know about Canada's taxes when filing your 2023 tax return.
Here are seven tax mistakes to avoid that could cost you money, according to this tax expert.
Reporting income
"You forget to include some type of a T slip, some type of income, or you make a deduction against your income that maybe weren't eligible to make by accident," Ricchio said.
That's a situation where it's possible the Canada Revenue Agency will reassess your tax return because there is a mismatch between what you reported on your taxes and what T slips the federal agency received on your behalf.
You could end up having to pay back the money you got as a tax refund or even have a tax owing balance that you now have to pay, according to Ricchio.
That's why it's important to not only know what T slips you should have but also understand what all of your T slips are.
Also, you should have your T slips and your receipts for donations or contributions for RSPs, TFSAs, and FHSAs in order before starting your tax return.
"I think that is where a lot of the mistakes and the errors for most people happen," Ricchio noted. "Sometimes they're kind of flying blind."
You could be costing yourself money if you're not prepared and not accurately reporting your income.
Filing by the tax deadline
Another mistake you could be making with your taxes that could cost you money is not filing by the tax deadline.
Ricchio noted that filing by the deadline and even filing before taxes are due is crucial.
So, "getting our heads wrapped around those deadlines, the impact that they have" is important to help make sure you don't have to pay even more money to the government.
The deadline for taxes in 2024 is April 30 if you're employed and June 17 if you're self-employed.
But here's where you could cost yourself money — the tax filing deadline in April is also when you have to pay your taxes, regardless of your employment situation.
So, that means if you file your tax return on April 30, you need to pay any tax balance that you owe that same day or the payment will be considered late.
Paying your tax balance
"The interest rate is now 10% on your unpaid tax balance and that's significant," Ricchio told Narcity.
So, not paying your taxes right away could cost you a lot of money especially when you have that 10% interest accumulating and any additional penalties.
"All of these things will add up and that feeds into what makes taxes so overwhelming for people," Ricchio said.
"The more we reinforce the importance of getting these things done on time, the better off everyone will be."
If you can't pay your tax balance immediately, you can arrange to pay your taxes over time in the CRA My Account portal using a pre-authorized debit agreement.
Using tax software
If you file your taxes using tax software from TurboTax, H&R Block, Wealthsimple, UFile and others, not using it efficiently could cost you money on your return.
Ricchio recommended connecting the program to your CRA My Account.
"Anybody who is required and mandated to issue a T slip to you is also required to submit it to the CRA," she said.
Once you create a connection between the program and your account with the CRA, all of the documents you need are right there.
That means "you don't have to worry" about forgetting to include a T slip on your tax return, according to the tax expert.
However, she noted that you should still do your own validations and run through a checklist of what you need to file your return.
Getting federal benefits
Quite a few tax mistakes stem from not filing your return by the April 30 deadline, including missing out on federal benefits and credits like the Canada Child Benefit, GST/HST credit and Canada Carbon Rebate.
"Delaying the filing of your tax return can impact and delay benefit payments from the government," Ricchio said.
That's because those federal benefits are all tied to tax returns.
"You delay your tax return, you can delay your payments," the expert noted. "You can stop your payments."
Even if you file right at the deadline, "you're in that influx of late" because the CRA has been processing returns since online filing opened in February.
"You get to the end of it, it's just delayed. Especially if you're not choosing to NETFILE."
Sometimes you have to file way before the tax deadline to receive payments on time.
You'll only get money from the Canada Carbon Rebate on the April payment date if you file your taxes electronically by March 15, 2024.
That payment will be delayed if you file after March 15, 2024, and you'll get your money once your tax return has been assessed.
Claiming non-refundable tax credits
Non-refundable tax credits can reduce your payable tax balance to zero so if you don't claim the credits you're eligible for, you could be costing yourself money.
If you forget to make a claim on your tax return, Ricchio said that you can fix it even after you've filed.
"The process is super simple," she noted.
You just have to log into your CRA My Account and manually do a T1 adjustment. You can also print the form and mail it to get that adjustment.
"The CRA will take care of it usually within four weeks or so," Ricchio said.
"Just because you forgot to do something doesn't mean that you don't have the full ability to go back and adjust your prior year returns," she continued. "Nothing that you're actually eligible is ever truly lost."
“You don't claim a non-refundable tax credit you're not reducing your calculated total tax payable."
Claiming refundable tax credits
Refundable tax credits can get you a refund when the total is more than the amount of tax due or if there's no tax due because deductions have reduced it to zero.
So, not claiming those tax credits when you're filing your return is a mistake that could cost you because you're leaving money on the table.
Since some credits are tied to your income reported on your tax return, if you're not filing or not doing it correctly — like overstating your income — you could accidentally disqualify yourself from receiving refundable tax credits.
"Understanding the way that it works is paramount to making sure that you maintain those benefits if you are truly and genuinely eligible to receive them," Ricchio said.
This interview has been condensed and edited for clarity.
This article's cover image was used for illustrative purposes only.
