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Tax season in Canada is almost here, and if you’re not careful, there are some simple mistakes that could end up costing you money — or even triggering an audit from the Canada Revenue Agency.
Whether you’re hoping to maximize your refund or just want to avoid unnecessary stress, getting your income tax return right the first time is key.
To get the inside scoop, MTL Blog spoke with tax experts Gerry Vittoratos, the national tax specialist at UFile, and Stefanie Ricchio, a CPA and spokesperson for TurboTax Canada, about the most common mistakes people make when filing their taxes in Canada.
From missing out on deductions to forgetting to report certain types of income, these errors could lead to penalties or missed opportunities for savings. Here are nine of the biggest tax-filing blunders to avoid on your 2024 income tax return, according to experts.
Waiting until the last minute
If you tend to procrastinate on your taxes, you’re not alone — but waiting until the last minute can lead to unnecessary stress and costly mistakes. Ricchio warns that rushing to file can cause people to miss out on eligible deductions or make errors that could result in penalties.
“Filing early not only ensures accuracy but also helps you avoid late penalties and interest, and gives you more time to address any unexpected issues, or source additional documentation you, or the CRA, may require,” Ricchio says.
To avoid last-minute panic, aim to gather your tax documents as early as possible and take advantage of online tax software or expert help if needed.
Not being aware of changes
Tax rules change every year, and if you’re not keeping up, you might miss out on new benefits or deductions. Vittoratos says many Canadians don’t realize that tax changes announced mid-year, like in the federal budget, often take effect immediately, meaning you need to stay informed to take advantage.
“In order to benefit from the changes, you must be aware of them and take advantage of them the year they’re announced,” Vittoratos explains. “If you wait until the following year during tax filing season, it is already too late.”
Checking the CRA and Revenu Québec websites, keeping up with finance news or consulting a tax expert can help you stay ahead of the game.
Not setting aside money for taxes
If you have a side hustle or freelance income, you might be in for a surprise when tax season rolls around. Since these types of income don’t typically have tax deducted at the source like a traditional paycheque, Ricchio says many Canadians forget to set aside money for taxes, which can leave them struggling to pay their bill in April.
“For many, having a big tax bill for their side hustle income can lead to significant financial pain and even tax debt,” Ricchio explains. “It’s important to estimate what you’ll owe based on your tax bracket and combined income, then set aside approximately 25% of the money earned each month, keeping these funds separate from your spending money to avoid surprises come tax time.”
Not keeping receipts
Forgetting to keep track of your receipts throughout the year might mean missing out on valuable tax deductions that could save you a pile of money come tax season. Vittoratos points out that too many Canadians — especially those who are self-employed — fail to organize their receipts properly, causing them to lose out on potential credits.
“Too often I have seen people who don’t archive their receipts properly and miss out on expenses they could have used for credits,” Vittoratos explains. This includes medical expenses, donations, work-from-home costs and business-related purchases.
The best way to stay on top of it? Vittoratos recommends creating an archiving system like a dedicated folder (physical or digital) to store all tax-related receipts throughout the year so nothing slips through the cracks.
Calculation errors
Making mistakes in your tax calculations might seem like a small issue, but it can lead to delays, audits and even penalties. Ricchio says these errors often come from miscalculating numbers on receipts and tax forms or selecting the wrong figures from a tax table.
“Luckily, avoiding these mistakes is straightforward. Online tax solutions like TurboTax automatically calculate and detect errors before submitting your tax return,” Ricchio says. If you’re filing manually, be sure to double-check all your numbers or consider using software that can do the heavy lifting for you.
Not reporting all your income
Side gigs, freelance work, investments, rental income and even tips — if you’re earning money, you need to report it. Ricchio says failing to report all income sources is one of the most common tax mistakes Canadians make, and it can result in serious consequences.
“Failing to report all your income is a common tax filing mistake that can lead to audits, penalties and interest charges,” she warns. “Some examples that you might not have been aware of but need to report include tips and gratuities, foreign income and income from platform services like ridesharing.”
If you’re unsure whether a certain income source needs to be reported, it’s best to check with the CRA or use a tax software that automatically imports your tax information from the CRA, like TurboTax’s Auto-Fill My Return, to ensure you’re not leaving anything out.
Missing out on deductions
Nobody wants to pay more taxes than they have to, but if you’re not aware of which deductions you qualify for, you could be leaving money on the table. Ricchio says that many Canadians miss out on eligible expenses simply because they don’t know what they can claim.
“Without the right information, you could be missing out on valuable savings,” Ricchio says. Tax-filing software like TurboTax and UFile is your friend here — they can help you find deductions you might not know about by prompting you with questions about your specific situation.
You can also research deductions that apply to your situation — such as work-from-home expenses, first-time homebuyer incentives, student loan interest or medical costs — and seek expert guidance if needed.
Missing out on banked credits
If you’ve ever had unused tuition credits, donation amounts or capital or business losses from past years, you might be sitting on savings without realizing it. Vittoratos says many taxpayers forget about these “banked” credits that can be carried forward and used in future years.
“Unfortunately, most taxpayers are not aware that they have these amounts in their files that can be used,” Vittoratos says. You can check your Notice of Assessment or log in to the CRA’s My Account portal to see if you have any credits waiting to be used.
Claiming ineligible expenses
While missing out on deductions is one issue, trying to claim expenses that aren’t eligible can be just as costly. Ricchio warns that incorrectly claiming personal expenses as deductions can end up costing you money and time.
“Claiming ineligible personal expenses can lead to audits, penalties, and repayment of improperly claimed deductions, she warns.
To avoid this, make sure you’re familiar with what qualifies as a legitimate expense — and keep detailed records to back up your claims.
By avoiding these common tax mistakes, you can save money, reduce stress and maybe even land yourself a bigger refund this tax season. Whether you’re filing on your own or using tax software, staying informed and organized is clearly key to a smooth experience.
Happy filing, Montreal!
This article was originally published on Narcity.
