5 Common Mistakes to Sidestep When Filing Your Personal Taxes

As the personal tax submission period approaches, it’s crucial to be wary of these five common mistakes when handling your personal taxes:
- Overlooking Medical Expense Tax Credits: Every year, many forget to claim tax credits for their medical expenditures. Ensure you compile your medical bills, which might include prescription medications, doctor visits, dental procedures, and prescription eyewear.
- Misunderstanding Moving Expense Claims: Simply relocating nearer to your new job doesn’t automatically qualify you for a moving expense deduction. To be eligible, you must have relocated at least 40 KM closer to your new job. This is determined by comparing the distances from your previous residence to your new job and from your new residence to your new job. It’s worth noting that moving expense claims are frequently audited, as many individuals miscalculate. For a deeper dive into moving expenses, consider reading up on tax reduction strategies in Canada.
- Disposing of Tax Receipts: Even if you’re e-filing your tax return, it’s essential to retain your tax receipts. The Canada Revenue Agency (CRA) might request them, especially during audits.
- Not Keeping Up with Tax Law Updates: Tax regulations evolve annually. Stay updated by visiting the CRA website to learn about the latest tax deductions and credits. For instance, a significant change in 2014 was the introduction of the family tax credit, allowing a transfer of $50,000 of income from the higher-earning spouse to the one earning less, optimizing the family’s tax savings.
- Neglecting to File Due to Low Income: Even if you had little to no income during the year, it’s still beneficial to file a tax return. This makes you eligible for refundable tax credits, such as the Canada Child Tax benefit or the GST/HST tax credit.