Tax Return Mistakes

I had a friend who used to take all of his t-slips and put them in an envelope and he would send them off to Revenue Canada for them to file his taxes. Sounds like a pretty convenient way to do your taxes, however he could have been missing out on some major tax breaks.

When it comes to filing your taxes, how much corrective work does the CRA actually do?

Most of us feel that once we have sent off our tax return and get back our notice of assessment, that our taxes are finished for yet another year. We would in fact be wrong. Starting in June of each year, the CRA goes back and starts reviewing our tax returns. If we have missed filing a T-slip, there was an amendment to a T-slip or any other modifications are made, the government will adjust our returns to accommodate the changes. This could mean that you will are required to pay back money that you received back.

One thing that the government will not be looking at is any credits or deductions that you may have missed. Forgot about a $500 donation? Too bad, they aren't going to know and adjust your return. Another thing they will not do is optimize between you and your partner. This could be a potential savings that you would miss out on entirely.

My advice would be to find a place in your home office to store all of your tax paperwork. This way you can be sure of capturing all those expenses you receive receipts for during the year. I also always do my husbands taxes and mine together. Some years it has no effect, but especially now that we have children it can have a huge impact. If you are not sure of what to look for when it comes to optimizing between spouses, contact a tax preparer that can assist you.

My final word of caution is don't receive a return and expect that to be the end of it. The government reserves the right to ask for some or all of it back for the next six years. Be prepared for that day in case it comes.

Have a great day!