Filing for taxes is important, but what is more important is to do it properly and on time. Most of the time people feel that a huge mistake in filing tax returns results in the Canada Revenue Agency coming and auditing them. However, in reality it is the simple mistakes that most people make which cost them a lot. More often it is the missed deductions and the inability to understand what needs to be filed that leads to trouble. It is always to get professional help for filing your taxes in case you are confused regarding certain parts or want some expert advice. Here are some tips to avoid issues while filing tax in Canada.
Report all your income
One of the most common mistakes that people make is to not report all their sources of income while filing for tax. According to the Canada Revenue Agency, it is important to report all your sources of income whether you receive it in cash or it is a part of your T4 or other slips. This should include your salary, gratuities and income from part time or freelancing jobs. Additionally, any benefits related to COVID 19 that has been claimed by you should also be reported as income.
Update your personal information
One of the easiest ways to avoid issues while filing tax is to keep your personal information up to date. This one of the simplest things that people tend to overlook and that can cause issues and delays in your credit payments. Make sure to update your information such as direct deposit details, any change in address and change in marital status as soon as they happen.
Make correct claims
Making incorrect claims while filing tax in Canada is quite common according to the Canada Revenue agency. It is very easy to get confused while making claims because of the amount information that has to be processed. Funeral and wedding expenses along with loans to family members are most often incorrectly claimed and are ineligible. If you are someone who is confused about the GST services and filing of tax returns in general, you can take help from gatewaytax.ca which will assist you in all tax related issues.
Don’t file your taxes too early
In the hope of getting tax refunds more quickly, some people tend to file their taxes too early. Even though there is nothing wrong with being before time, sometimes you may miss certain documents such as investment slips and T4 from your employers. If this happens, it will only double your work of making amendments and may put you at a risk for penalties related to the misreporting of your details if it happens frequently. Therefore, take your time to file your taxes and don’t be in a hurry.
Have valid receipts
Not having valid receipts for the claims you make is one of the most common mistakes made by the people of Canada according to the CRA. The receipts should clearly mention the correct date and support the claims that you make. An official receipt is needed for this and not invoices.
Report your common law living arrangement
If you and your partner are married or are living under a common law arrangement then filing taxes as common law can avail you benefits like that of a married couple. If your partner has a low income then you can claim tax credit for it. For more information on how to correctly file for tax as a common law visit gatewaytax.ca and get the benefits of it.