10 Common Tax Mistakes Canadians Make Every Year

The deadlines for filing your tax returns are April 30 for individual returns, and June 15 if you’re self-employed. However, even if you’re self-employed, you still need to pay your taxes by April 30. If you’re late, the Canadian Revenue Agency – or CRA – can incur a penalty of 5% of your balance owing plus an additional 1% for every month you’re late.

If you’ve already paid a late-filing penalty in the past three years, you will be charged 10% of your balance owing plus 2% for every month you’re late. Whenever you feel like you’re having to pay too much in tax, remember that there are several countries with higher income tax rates than Canada.

If you’ve moved house for work or study purposes, you can claim moving expenses if your new home is at least 40 km closer to your new work or school. However, not all your expenses in this regard are eligible. According to the CRA, you can’t claim for home staging, house hunting, repairs to the old house, storage fees near your old house, job hunting, temporary accommodation and mail-forwarding charges.

One of the main reasons for paying your student loans fast is that the longer you take to pay them, the more these loans will cost you in interest. However, the CRA says you can claim for the interest you paid on certain student loans. You can claim only once and not for personal loans, student lines of credit or foreign student loans.

The CRA says that Canadians often claim tuition fees that aren’t eligible for a tax refund. For example, they claim for tuition at education establishments that aren’t recognized. There are many things you can’t claim as tuition fees, including extracurricular activities, meals and lodging, books and goods of lasting value that you will keep after you’ve completed your studies, such as a computer.

With so many common health concerns in Canada, it’s a relief to know that there’s a wide range of medical expenses for which you can claim.

However, you can't claim for everything that might seem like a medical expense. Expenses that aren’t eligible include medical practitioners – such as alternative health practitioners – that aren’t recognized by the applicable provincial authority, vitamins and supplements, over-the-counter medicine, rubbing alcohol, bandages and non-hospital beds.

One of the best ways to cut your car costs is to use public transit whenever you can. You can reduce your commuting costs even further if you claim for your transit pass. However, you need to be sure the transit pass is eligible, showing your name or other unique identifier and that all the information on it is legible.

The CRA says your public transit pass will also be ineligible if your age disqualifies you, if you haven’t made enough trips during a month, if there were interruptions in use and if you only travelled a limited amount during the period.

Retire Happy says that people often try to claim for expenses they’re not entitled to. Of course you should deduct every expense you legally can, but you also need to be realistic about it. Then again, some of the most outrageous tax claims Canadians have made were accepted, so you’ll never know unless you try.

According to the CRA, one of the most common tax mistakes Canadians make year after year is to not sending valid receipts when asked. The date on each receipt should be correct and support your claim. You should also send official receipts and not invoices.

If you and your partner are living in a common law arrangement, filing as common law will get you the same treatment as a married couple. Retire Happy says that this can have advantages, like being able to claim a tax credit for a low-income partner. In fact, there are several retirement tax tips to save your nest egg that involve your partner.

When you’ve submitted your tax return and then realize you’ve made a mistake, there’s no reason why you should just sit back and cut your losses. Instead, wait for your Notice of Assessment to arrive. Then, according to The Balance, there are different ways to request a change to your tax return. You’ll need to submit supporting documentation, though, and it’s up to the CRA to decide whether or not they’ll allow the change.