A recent article in Global News cited three common tax mistakes that you’re most likely to make according to Canada Revenue Agency.
See the full article here, or read below for our helpful summary:
“Other” Deductions Section of your Return
Many of our clients have questions regarding this section, as it seems a bit of a “free for all” of items that you could potentially deduct. However, this section is very specific and also quite limited. This area on your tax return- Line 232- “Other” Eligible deductions, are listed here on the CRA website.
Some of these include:
- Income amounts repaid ex. EI benefits repaid to Service Canada, scholarships/bursaries, Old Age Security benefits paid directly to Service Canada, etc).
- Legal Fees Related to accounting/assistance for reviewing your assessment with CRA, payment of fees to collect a retiring allowance or pension benefit, or you incurred fees to make child support payments non-taxable.
- Other Deductible Amounts Depletion allowances, and specific unused RRSP contributions, transfer of RRSP payments and refund of RRSP premiums.
Mistakes on Education Related Tax Breaks
- Tuition tax credit Students over the age of 16 enrolled in post-secondary level courses can usually claim their tuition costs, and pass on the credit to an eligible relative who have more taxes to offset (ex. parents and grandparents). However, it is still the student who needs to claim the tax credit on her or his return.
- Education/Textbook Credits This is more confusing to claim on your 2017 tax return because the education and textbook amounts were discontinued at the federal level as of Jan. 1, 2017, but continue to exist at the provincial and territorial level in many cases.
This may seem like common sense, but it is your responsibility to let CRA know of any address changes. If they are not able to get a response from you (after sending you mail requesting more information/documents), they have the power to deny or modify claims. This could ultimately result in a higher tax bill.
If you have questions about your return, it is usually wise to have a certified accountant help you with any questions or concerns you might have. Filing your return yourself, and making significant mistakes, can cause CRA to flag your return (which could result in penalties).
A Chartered Professional Accountant also has the knowledge and experience to complete your return in the most efficient manner, making the most of your return and limiting unnecessary payments. Remember, it doesn’t have to cost you a lot to make the most of a professional accountant. Cahill CPA offers reasonably priced fees for basic returns, and can discuss the breakdown of costs up-front with you so you are comfortable with what you will be paying. You will feel confident that your return is done correctly, efficiently, and quickly.