These Are The Most Common Tax Mistakes You Can Make On Your Return, According To An Expert
If you're getting ready to file your Canada taxes this year, there are quite a few tax mistakes you can make, according to an expert.
You might not even know you're making these errors on your tax return and it could cost you money!
Narcity spoke with Stefanie Ricchio, a CPA and spokesperson for TurboTax Canada, about taxes and what you need to know when filing your tax return in 2024.
That includes common mistakes you can make while doing your taxes, mistakes that cost you money, mistakes that have you missing out on getting money back from the federal government, and more.
Now, let's get into the most common mistakes you should avoid making during tax season this year.
Not being prepared
Being prepared to do your taxes can help ensure benefits aren't delayed, you don't get your tax refund delayed, or you don't incur any interest charges on your tax-owning amount.
"It's just a good healthy practice to build to get into the motion and start to collect those documents starting January, February," Ricchio said.
Also, it's important to know your eligible deductions, be aware of the T slips — including knowing who should be sending you those documents — and have all your receipts — like for donations or contributions to RSPs, TFSAs and FHSAs — in order.
"That just is where a lot of the mistakes and the errors for most people happen," Ricchio noted. "Because sometimes they're kind of flying blind."
Not using tax filing software efficiently
You probably do your tax return online with tax software but you might not be using that software efficiently.
"Connect it to your My CRA Account," Ricchio recommended.
"Anybody who is required and mandated to issue a T slip to you is also required to submit it to the CRA."
So, once you create that connection between the NETFILE-certified tax software you're using and your CRA My Account then everything is there.
"You don't have to worry," Ricchio said. "You do your validations, of course, run through your checklist but it's all there for you."
Doing that "helps you with mitigating the risk of" forgetting a slip that you need to submit when filing.
If you're filing your taxes using software, the Canada Revenue Agency recommends NETFILE-certified tax software from companies like TurboTax, H&R Block, Wealthsimple, UFile and more.
Not knowing which tax credits and deductions to claim
There are a lot of tax credits, both federal and provincial, so it's understandable that you might not know every credit and education you're eligible to claim.
"A non-refundable credit, you go into the system when you're preparing your tax return and you go ahead and you make the selection to claim it," Ricchio explained.
But you might forget to claim a tax credit on your tax return.
"If you forget to apply for any eligible non-refundable tax credit, the process is super simple to fix it. You can go ahead and log into your My CRA account online and just manually do a T1 adjustment."
Or, you can print that adjustment form and send it through the mail.
"The CRA will take care of it usually within four weeks," 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."
Also, changes have been made this tax season to some credits and deductions that you should know about before filing.
Claiming home office expenses now has to be done through a detailed method, not the flat rate method.
"People are gonna go looking for that $500 flat rate method and it's not going to be there," Ricchio noted. "If you want to claim your at-home expenses, you need to make sure you have the conversation with your employer so that they sign for you that T2200."
"As long as they sign that for you, you're good to go to use the detailed method and continue to claim expenses that are eligible," she continued.
If you're looking for the Ontario Staycation Tax Credit when filing, you won't find it.
"We had, in 2022, the Ontario staycation credit which you would have claimed on your return last year, but that was not eligible for any Ontario travel in 2023," Ricchio said.
"So, that one's also off the books for this year's tax return."
Not getting your federal benefits
There are quite a few federal benefits and credits that rely on your tax return each year.
"Delaying the filing of your tax return can impact and delay benefit payments from the government," Ricchio said.
That includes the GST/HST credit, the Canada Child Benefit and the climate action incentive payment which is now the Canada Carbon Rebate.
"Those are all tied to your tax return," Ricchio noted. "You delay your tax return, you can delay your payments. You can stop your payments."
Even if you file your 2023 tax return right at the deadline this year, you could still be "in that influx of late," according to Ricchio.
That's because filing opened up on February 19, 2024, so the CRA is already going through tax returns that are coming in.
"You get to the end of it, It's just delayed," Ricchio said. "Especially if you're not choosing to NETFILE."
Not knowing tax deadlines
If you're not aware of Canada's tax deadlines, that's a huge mistake with some pretty pricey consequences.
The deadline for filing taxes in 2024 is Tuesday, April 30 if you're employed.
Then, the last day to file taxes in 2024 if you're self-employed is Monday, June 17 since the usual deadline — June 15 — is on the weekend this year.
However, Ricchio noted that if you have any tax owning, the deadline is also April 30 no matter what you're employment situation is.
"That's really, really important and I think that's something that gets often confused," the expert said.
Not knowing the tax filing deadline could cost you a lot of money because you rack up interest on unpaid tax amounts.
"The interest rate is now 10% on your unpaid tax balance," Ricchio revealed. "When you think about that 10% interest and then any other additional penalties, all of these things will add up."
"That just feeds into what makes taxes so overwhelming for people," she continued.
So, "getting our heads wrapped around those deadlines, the impact that they have" is important, according to Ricchio.
This interview has been condensed and edited for clarity.
This article's cover image was used for illustrative purposes only.
