5 Expensive Mistakes You Can Make on Your Tax Return in Canada

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5 Expensive Mistakes You Can Make on Your Tax
Return in Canada
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Did you claim the wrong deduction on your taxes?
Or, did you forget to state a job income that you
had a T4 for? Mistakes can cost you a lot,
especially when making mistakes in filing tax
returns.
Here are some common mistakes you need to look
out for a while filing your personal tax return.
1. Failing to report Principal Residence Exemption
The Principal Residence Exemption provides an
exemption from tax on any profit gained from the
sale of property that is designated as your
principal residence. The sale must be reported
on your tax return along with the designation on
the second page of Schedule 3. You should also
fill sections related to the principal residence
in Form T2091.
2. Not Reporting Foreign Properties and Income
If you owned any foreign property with a total
cost exceeding 100,000 at any time of the year,
you are required to submit Form T1135 along with
your tax return by the due date.
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3. Filing Taxes Past the Due Date
Delay in paying tax is taken very seriously by
Canada Revenue Agency (CRA) and can be charged
with a penalty of 5 of the total owing with an
additional 1 for every month delayed. If you
have been charged with a late penalty for the
past 3 years, you will receive a penalty of 10
of the total owing plus an additional 2 for
every month delayed.
4. Not Keeping Your Receipts
Most Canadians file their individual income tax
return online and does not require sending
receipts for the items you make claims on.
However, the CRA could ask you to produce the
receipts, and failing to do so may mean that the
deduction is disallowed. In turn, you may end up
paying more taxes than you thought and this
includes penalties of up to 125 of the amount
stated on the receipt.
5. Doing it Yourself
Filing a tax return can be really complex as
there are too many rules and messing them up
could cost you a lot of money. Approach a
professional accountant to gain insights an
dadvice on how to get maximum returns.
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