Three Common Mistakes People Make When Filing Their Income Taxes
Filing income taxes can be a complicated process, so it should not come as a surprise that taxpayers often get the tax filing process wrong in the first attempt.
However, while it’s okay to make mistakes and learn from them, your error could have you coughing up more in taxes than you should. You may have to return the benefits you have already received, or face penalties.
To avoid paying unnecessary fees it’s best to work with a certified public accountant, who can save you valuable time and money, thanks to their expertise in filing tax returns successfully. A professional chartered accountant will also navigate you through the intricacies of taxation and help you comprehend the process right from the get-go so that you don’t make mistakes.
To help you understand the potential errors that could occur with your taxes and show you how you can avoid them, Can-Am CPA Professional Corporation has put together three common mistakes Canadians make when filing their income taxes.
1. Forgetting to report income from side jobs
It’s common to forget to mention to your accountant that you had a side job during the year, like working as an Uber driver or part-time contractor. You could make this mistake thinking that it’s unnecessary to report the income or forget about it.
However, it is crucial to report all sources of income and show an accurate representation of your earnings of the year to the CRA. It’s also important to report all your earnings to prevent a tax refile that could lead to tax liabilities.
2. Throwing away receipts after filing their taxes
You need to keep a copy of any receipts you have claimed in your tax returns for up to six years. It is vital to hold on to these receipts in case you get audited by the CRA to show proof for the claims you made in previous years. It’s essential to form a habit of carefully storing all receipts and tax slips by year.
3. Missing the tax deadline or rushing to file on the very last day
The traditional tax deadline is April 30th. That is the date for individuals who have tax liabilities to file their returns and pay back their owed amounts. Any outstanding amounts not paid by April 30th could be subject to interest and penalties.
It’s crucial to file earlier than the deadline to have enough time to pay your taxes before the due date. If you own a small business, you have a tax filing deadline of June 15th, but any amount owed to the government is due on April 30th.
To avoid making these and other mistakes when filing your income taxes, get in touch with Can-Am CPA Professional Corporation. We are a full-service accounting and taxation firm in Toronto, Weston, and the surrounding areas.
Over the years, we have built a strong reputation in understanding client needs and have demonstrated our ability to translate those needs. It’s the main reason why more businesses and entrepreneurs choose us as their premium destination for tax and accounting advisory. In addition, our team of accounting professionals offers superior quality services in an open and friendly environment. We serve clients across Toronto, Pickering, Ajax, Mississauga, Brampton, Vaughan, Woodridge, and the surrounding areas.