5 Common Mistakes to Avoid When Filing Your Tax Returns in 2020

5 Common Mistakes to Avoid When Filing Your Tax Returns in 2020

Right about now, you’re probably eagerly awaiting the arrival of spring weather, which unfortunately could still be a while away. The season that is around the corner though, is the tiresome tax season. We get that it’s not quite as exciting as warmer temperatures, but filing your taxes is necessary. Today, we will present some problems that make the tax season much more “taxing” than it has to be.

1) Not updating your mailing address

It sounds rather basic, but it is the most common error among taxpayers, says Kareen Dionne, regional spokesperson for the Canada Revenue Agency (CRA).

“If you move, notify us of your new address as soon as possible. Otherwise, your refunds could be interrupted, whether you receive them by direct deposit or by check,” she says. Similarly, if the bank account in which your payments are deposited changes, be sure to provide the necessary information to the CRA.

2) Choosing the wrong person to fill out their tax returns

It can be very tempting to call on your brother-in-law, who swears that he knows all about taxes and that he will fill out your declaration in time. But before jumping on the first offer, it is important to carry out a few small checks.

For security reasons in particular, government authorities advise against entrusting the filing of tax returns to a person whose experience in the field is unknown. “Make sure you choose someone you trust and check their references,” recommends the Canada Revenue Agency.

In this case, Liberty Tax is the most reliable option you can find. Our experience of more than two decades coupled with one of the largest clienteles in the country provide you the guarantee that you need to choose us.

3) Not filing returns because you have no income

Even if you are a student, unemployed or retired, you must file your tax returns. You could benefit from tax credits that can generate a refund. Especially this year with the refundable Climate Action Incentive, you are probably eligible to receive at least $444 more than last year! Also,, you may be able to claim the GST credit, record your tuition fees so you can transfer them to a parent or spouse, or simply carry them over to a later year.

The Canada child tax benefit is based on family income. In order for families to receive the correct amount, it is important that both parents – or the one who has custody of the child in the case of a separated couple – file income tax and benefit returns, even if there is no income to declare.

4) Exceeding the deadline for filing your tax returns by a few days… telling yourself that they will eventually surrender anyway

If you don’t pay your federal and provincial taxes on time, on April 30 – or if, as a result of an error made in your return, you end up with a balance owed on your notice of assessment -, you risk yourself penalties for late filing: 5% of the balance owing plus 1% per full month of delay, up to a maximum of 12 months.

The penalty may be higher if you have already been charged one for the late filing of a return from one of the previous three years.

5) Not keeping electronic copies of all relevant documents and receipts on the pretext that you have completed your declarations 

“You must keep your old tax returns – as well as all of your supporting documents – for six years, even if you don’t have to attach them all to your returns,” warns Kareen Dionne. Not being able to provide the required documents when you are asked for them – to make changes to your return, for example – may result in denial of the credit or deduction you claim or delay in processing your return.”

Therefore, it is recommended that you keep copies of the following documents during this period:

  • T4 slips (employment income);
  • medical fees;
  • contributions to a registered retirement savings plan (RRSP);
  • alimony;
  • charitable donations;
  • childcare costs;
  • moving expenses

Conclusion

Mistakes like the ones discussed can become costly for you in the long run. When you have trusted advisors like Liberty Tax managing your taxes, you can mitigate these risks and remain stress-free during this tiresome season. You can keep on doing your life while we do your taxes!

2020-02-14T00:00:52+00:00
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