Here are some of the most frequent mistakes Canadians make during the Canada tax filing process—and how to avoid them.
1. Missing the Tax Filing Deadline
One of the most common errors in Canada tax filing is missing the deadline. For most individuals, the deadline to file is April 30. If you're self-employed, you have until June 15, but any tax owing must still be paid by April 30 to avoid interest charges.
Failing to meet the deadline may result in late-filing penalties, which increase the longer you delay. Even if you can’t pay your full tax amount immediately, it’s better to file on time and arrange a payment plan with the CRA than to file late.
2. Not Reporting All Income Sources
During Canada tax filing, all sources of income must be reported. The CRA receives tax slips directly from employers, banks, and investment firms. However, many people forget to include:
Freelance and gig income (like Uber, SkipTheDishes, or Etsy)
Rental income from properties
Foreign income
Cryptocurrency gains
Interest from private loans
Failing to declare income can lead to audits and reassessments, often with added interest and penalties.
3. Claiming Ineligible Expenses
Another frequent mistake in Canada tax filing is claiming expenses that aren't allowed. Just because an expense is work-related doesn't mean it’s automatically deductible.
Some ineligible or questionable deductions include:
Commuting costs between home and work
Personal clothing, unless it’s a uniform or protective gear
Home office claims that don’t meet CRA eligibility
Always check CRA guidelines before claiming deductions to ensure you’re on solid ground.
4. Providing Incorrect or Incomplete Information
A small error in personal information can delay your return or even trigger a CRA review. During Canada tax filing, double-check:
Your Social Insurance Number (SIN)
Spelling of your name
Current mailing address
Direct deposit details
Using outdated or incorrect info can create unnecessary complications.
5. Forgetting to Sign the Return (for Paper Filers)
While most Canadians now use digital methods for Canada tax filing, some still prefer the paper route. If you file by mail, make sure you sign the return. The CRA won’t process unsigned returns, and this could delay your refund and cause late penalties if not corrected promptly.
6. Not Keeping Receipts and Documentation
You don’t need to submit receipts when filing, but you do need to retain them in case the CRA asks for proof later. This includes documentation for:
Charitable donations
Childcare costs
Medical expenses
Tuition and education credits
Keep these records for at least six years. Poor record-keeping is one of the most overlooked aspects of responsible Canada tax filing.
7. Missing Out on Eligible Tax Credits and Deductions
One of the biggest missed opportunities during Canada tax filing is not claiming all the credits and deductions you’re entitled to. Some commonly forgotten ones include:
Canada Workers Benefit (CWB)
Moving expenses (if you moved for work or school)
Student loan interest
Disability Tax Credit (DTC)
Home Accessibility Tax Credit for seniors and those with disabilities
These can significantly reduce your tax bill or increase your refund, so take the time to explore them fully.
8. Filing Too Early or Too Late
While filing early can be advantageous, doing so before receiving all your tax slips can lead to an incomplete return. On the other hand, waiting until the last minute increases your risk of errors and missed deductions.
The key to a successful Canada tax filing is timing it right: wait until you've received all necessary documents (usually by early March), and aim to file by mid-April to avoid the last-minute rush.
9. Not Reporting Foreign Assets or Property
If you own foreign property worth more than $100,000 CAD, you must file Form T1135. This includes real estate, stocks, bank accounts, or other financial assets located outside Canada. Many people are unaware of this requirement during Canada tax filing and end up facing steep penalties for non-compliance.
Foreign income must also be reported, even if taxes were already paid in another country. You may be eligible for a foreign tax credit to avoid double taxation.
Final Thoughts: Avoiding these common errors can save you time, stress, and money. Canada tax filing doesn’t have to be overwhelming if you're organized, accurate, and informed. Whether you're handling it on your own or with the help of a professional, attention to detail is crucial. Make a checklist, gather all documents ahead of time, and double-check your information before submitting your return.
