The Biggest Tax Return Mistakes Made Every Year, and How to Avoid Them
It’s tax day, and as we said this morning, that means a lot of people around the country are going to be late in filing their taxes this year. But even if that’s the case for you, don’t be so hasty in your rush to file them that you make some of these most common mistakes. Yes you will receive a penalty for being late in filing, but you’ll incur bigger penalties in the form of missed credits and deductions, CRA inquiries, or even worse, a full blown audit if you make a lot of mistakes.
Messing up the income stuff
There are a number of ways you can wrongly declare income. You can accidentally state you made too much by placing income on your return twice, you can purposely leave out income you made such as tips so you’re not dinged for more taxes, or you can neglect to claim income made from the sale of a home. The government is doing some serious cracking down on people who aren’t totally upfront about their income; and making mistakes could also cost you money, in addition to the vengeful eye of the CRA.
Messing up the kid stuff
Do you claim your child as a dependent? Only if your’e a single parent. Do you claim childcare expenses? Only if you have proper receipts and SIN numbers if a private individual is taking care of your children. Are you claiming tuition? Only if you file form T2202, and it’s signed by the child, but submitted with the parents’ tax return. Yes, claiming anything regarding your children on your tax return is tricky business. If you want to, you may want to leave your taxes to a professional this year.
Messing up the work stuff
Claiming business expenses can also be tricky, so make sure you’re careful with them. Don’t claim anything that’s not 100% used for business, even if it’s just a certain square footage of your home. Also don’t give into the temptation of just dumping all your business expenses into one or two of the many categories they give you. This is something the CRA has a very careful eye out for, so make sure you take the time needed to sort them properly.
Messing up the moving stuff
Did you move in 2012? Was it for work? If so, you might be eligible to claim all kinds of moving expenses – everything from real estate fees incurred from selling your home to payments made to the movers. Make sure you again get proper receipts, and submit them with your tax return; you’ll be thankful that you took the time.