Are you tired of making costly mistakes when filing your personal taxes? In this video, we’ll go over the top errors people make when doing their taxes. Tune in to learn how to file your personal taxes like a pro to maximize your returns and minimize your stress during tax season!
For those who prefer to read, a summary is available below the video.
Today, I’d like to highlight some commonly overlooked aspects when filing personal taxes. We’ve identified four major mistakes that people tend to make, so it’s crucial to pay attention to these details to ensure a smooth tax filing process.
1. Not reporting all income
One common mistake is failing to report all sources of income. It’s easy to overlook additional income earned from side jobs or other sources while reporting regular job income.
However, it’s essential to report all income accurately to avoid complications during an audit. To stay on top of things, it’s crucial to ensure that every income source is included in your tax returns.
2. Missing expenses and deductions
The second most common mistake we’ve observed is the failure to identify all eligible expenses and deductions. This frequently happens when people overlook employment-related expenses that can be written off through their employers, or when sole proprietors neglect to report specific expenses such as vehicle usage or home office expenses.
It’s essential to ensure that you claim all eligible deductions and expenses correctly, as missing out on these could result in missed savings and a higher tax bill.
3. Not updating information with CRA
Another crucial mistake that we often come across is failing to update personal information with the Canada Revenue Agency (CRA).
This may seem trivial, but it’s of utmost importance as the CRA uses the provided information to mail your Notice of Assessments, and in case of any audit or request for additional information, they would send it to the last known address. Keeping your information up-to-date, including your phone numbers, marital status, and address, is essential to ensure timely and accurate communication with the CRA.
Neglecting to update your correct information can have consequences for the benefits you receive from the government, making this mistake even more critical to avoid.
4. missing out on key forms
Lastly, an incredibly significant mistake that taxpayers often make is missing out on critical filing forms. For instance, suppose you own property outside of Canada worth more than a hundred thousand dollars, that can include stock investments or real estate.
In that case, there are separate filing requirements that must be met, and failure to do so can result in hefty penalties. For instance, the T1135 form has a penalty of up to $2500 per year.
Other common examples of missing key filing forms include incorrect filing of forms when selling your principal residence, which can result in high penalties. If you’ve watched some of our other videos, you would be aware of the new UHT tax, which has another separate filing form that can attract hefty penalties, starting at $5,000.
Therefore, it’s crucial to ensure that you file all the required forms and provide all necessary information accurately when filing your tax return to avoid such penalties.
Get Expert Help for a Stress-Free Tax-Filing Experience in Canada.
In conclusion, avoiding common tax mistakes can save you from potential headaches and financial loss in the long run. By reporting all sources of income, claiming all eligible expenses and deductions, updating your information with the CRA, and filing all required forms accurately, you can ensure a smooth tax-filing process while keeping yourself in good standing with the government.
We are always here to assist you with any questions or concerns you may have regarding your tax filings. Whether you require help with the filing process or need assistance in taking care of those filings, do not hesitate to reach out to us. We are committed to providing you with the necessary support and guidance to ensure that your tax returns are filed correctly and on time.