Tax Time 2020: 7 Common Personal-Tax Filing Mistakes
Ah, tax time. Everyone’s favourite time of year.
Oh, is that just us?
We just love the numbers, the details, and executing the tricks of the trade that save our
But we also get that it can be a stressful time of year—an extra thing to do on top of your already busy schedule.
And it’s not something you can just
If you do something wrong because of missing a pesky detail or some changes to the tax code and you don’t pay your dues, there are some serious penalties to pay.
We have also seen too many clients pay far too much in taxes because they aren’t aware of all the tax breaks the government provides.
Call us Albertan, but we think you already pay enough taxes.
But perhaps your taxes are simple, or maybe you just don’t mind going through all the nitty gritty required to file taxes flawlessly yourself.
If that’s you, great. We’re kindred spirits.
But please, avoid these seven common personal-tax filing mistakes.
1. Failure to File your tax return
This is number one, and hopefully the most obvious mistake. But unfortunately, many people just “forget” to file their taxes.
Or perhaps you had your company’s corporate taxes filed, and since the business is in your name, you think that should be sufficient.
Let’s make this
EVERY adult must file a tax return each year.
Even if you
Even if you
Even if you really really don’t want to.
You might also miss out on government cash benefits like
- the GST Credit
- Canada Child Benefit
- Canada Workers Benefit
2. Ignoring student loans and other debts.
Did you know you can write off the interest you pay on student loans and any investment loans?
For student loans, you need to have an official document from the student loan organization and tell the CRA how much interest you paid (on line 31900).
For investment loans, you need a similar document from the bank or other lender, and you need to declare to the CRA the amount of dividends you’ve earned (on line 12100) and interest you’ve paid (on line 31900).
3. Not signing the back of the T2202A Tuition Slip.
You may already know that students can defer their claim/write offs or designate the transfer of an amount to a spouse, parent, or grandparent.
The process usually goes something like this: The student or family member
But did you know that there is a place for the student to sign on the back of the form?
When the student signs the back of the Tuition Slip, it means that the student understands that a maximum of $5000 of their tuition tax credit will
And if the CRA does a random audit, asking you to justify the tuition claim on the family members’ tax return,
4. Being unaware of
what should on an official charitable donation receipt. be included
The reason you need to ensure the receipts are acceptable is that if the CRA
Check the CRA website for a checklist detailing
5. Being unaware of the CRA’s annual tax-rule changes.
Every year, the government adds and subtracts things we can claim on our tax return.
And you can miss tax breaks because of it. Such as the home accessibility tax credit implemented a few years ago.
And if you’re filing your return by hand as opposed to using a program (which we don’t recommend),
- The Children’s Art & Fitness tax credits
- The First Time Donation credit was also phased out after the 2017 tax year
- Public Transit passes
- Federal Education & Textbook tax credit (unused amounts can
forward) be carried The Alberta Climate Leadership adjustment rebate in 2019 was eliminated
6. Claiming expenses on employment income.
If you’re an employee, but you have to use your personal vehicle or any out-of-pocket expenses to carry out your job and your employer is not reimbursing you, you can claim these expenses on your personal tax return.
However, you must get your employer to fill out a T2200 Form.
If you do not have this T-Slip completed, you cannot claim your employment expenses—which means you could miss out on getting as much as a 50% increase to your tax refund.
7. Sole proprietor mistakes.
There’s a whole new world of items to fill out and write off when you are
- Not filling out the T2125 (Statement of Business or Professional Activities) correctly
- Miscalculating (using a program like
is a better bet than calculating by hand) Turbotax
- Missing out on expenses you can claim as a sole proprietor
- Not recording your capital cost allowance on your vehicle (depreciation)
- Putting both professional income and business income on the same T2125
- Claiming 100% of your vehicle expenses.
Note that you should
We hope this list of common tax-filing mistakes helps keep you on the straight and narrow, CRA-compliance speaking.
Prefer someone else to worry about these potential mistakes (and others) for you?
Ask us to give you the peace of mind to efficiently and accurately file your taxes this tax season.
In your corner,