Embarking on the intricate journey of tax filing in Canada can be a labyrinth of potential mistakes, often unbeknownst to taxpayers. This is where Greystone Taxes & Bookkeeping becomes your invaluable ally, transforming your tax preparation from a potential headache to a strategic financial move that can mean the difference between owing and receiving a refund.
Common Mistakes to Sidestep:
Mistake #1: Forgetting all sources of income
The cardinal sin in tax filing is failing to report all sources of income. Every penny must be disclosed to the CRA, from tips and self-employment to rental and investment income. Failure to do so may trigger an audit, leading to the clawback or denial of benefits and credits, accompanied by potential penalties and interest.
Mistake #2: Forgetting allowable deductions or credits
Claiming incorrect deductions and credits is a prevalent error. The tax code offers various opportunities for taxpayers to reduce their liabilities, such as out-of-pocket medical costs, childcare expenses, and employment-related outlays. Greystone Taxes & Bookkeeping excels in maximizing your tax savings by diligently applying all eligible deductions and credits, including often overlooked ones like student loan interest, union dues, home buyers tax credit, and work-related expenses paid out of pocket.
Mistake #3: Missing the tax deadline
Procrastination breeds errors and stress during tax season. Gathering necessary documents for accurate tax preparation takes time. Failure to meet the deadline results in delayed refunds, potential delays in benefit payments, and the imposition of interest charges and penalties by the CRA.
Mistake #4: Claiming ineligible expenses
Erroneously claiming non-existent deductions or credits, like attempting to claim a spouse or parent as a dependent, can lead to complications. Understanding eligibility criteria is crucial to avoid such pitfalls.
Mistake #5: Misreporting marital status
Misrepresenting your marital status, especially regarding common-law relationships, can have financial repercussions. Declaring as single when common-law could lead to owing back overpaid benefits.
Mistake #6: Not transferring unused tax credits to family
Individuals and students can transfer unused tax credits to family members, optimizing tax savings. However, understanding the limitations and one-time nature of these credits is vital.
At Greystone Taxes & Bookkeeping, our mission is to streamline your tax filing process. We identify missing information and guide you throughout the year to leverage credits and benefits, reducing your taxes owing and maximizing your refund. For all your tax and bookkeeping needs, contact us today and experience the difference expertise can make.