6 Mistakes to Avoid at Tax Time

  • tax, cra, tax tips, benefits, deductions, gst

Here are some tax tips that can save you time and money! At tax time, avoid the following six things:

1. Not doing your taxes

Even if you have not received income for 2016, you should still file your income tax and benefit return. You may be eligible for a refund, credits and benefits such as the Canada child benefit and the goods and services tax/harmonized sales tax (GST/HST) credit. To get your benefit and credit payments, you have to file a tax return every year so that the CRA can calculate the amount you should receive.

2. Not reporting all your income

Make sure you report all your income. You should have received most of your slips, such as T4 slips, from your employer, payer, or administrator by the end of February. If you have not received, or have lost or misplaced a slip for 2016, ask the issuer of the slip for a copy.

Sold your principal residence in 2016? Starting with sales in the 2016 tax year, you are required to report basic information (date of acquisition, proceeds of disposition, and address) on your income tax and benefit return when you sell your home to claim the full principal residence exemption.

If you want to correct earlier mistakes and put your tax affairs in order, you can make a voluntary disclosure through the CRA’s Voluntary Disclosures Program. The program gives taxpayers a second chance to correct their taxes.

3. Making a claim you’re not entitled to

Various non-deductible amounts, such as funeral expenses, wedding expenses, loans to family members, a loss on the sale of a home designated as a principal residence, and other similar amounts, are sometimes claimed in error.

If the CRA determines that a taxpayer has made a mistake or made a claim to which they are not entitled, their return is adjusted.

4. Missing out on tax credits, benefits, and deductions

The Government of Canada has credits, benefits, and deductions that may apply to your tax situation.

5. Filing late

If you have a balance owing and do not file your return on time, the CRA will charge you a late-filing penalty. The penalty is 5{cae2521f64dcff784c511b644c6cc8c98f9594c79acdd41ba953a724385391e5} of your balance owing on the due date of your return, plus 1{cae2521f64dcff784c511b644c6cc8c98f9594c79acdd41ba953a724385391e5} of your balance owing for each full month your return is late, to a maximum of 12 months. Even if you cannot pay your balance owing by the filing deadline, you can avoid the late-filing penalty by filing on time.

If you cannot pay the amount you owe by the due date, it is best to contact the CRA before then. The CRA will work with you to resolve your tax debt or other government programs debt. You may qualify for a payment arrangement or taxpayer relief.

6. Not keeping receipts and records

Keep your receipts and documents for at least six years after you file your return. If the CRA chooses to review your return, you will need to send your receipts to the CRA to support your claims.

If you need help with your taxes, or want more information on programs and benefits that can help you and your family, contact GB Pilley & Associates Ltd., Chartered Professional Accountants at 604 926 3522.

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2017-04-26T15:40:24+00:00