4 costly mistakes to avoid when filing your tax return

December 12, 2014

Unless you're an accountant, tax season probably fills you with dread. If you'll be filing your own tax return this year, here are four mistakes to avoid that could wind up costing you money.

4 costly mistakes to avoid when filing your tax return

As it stands, most Canadians are anxious enough about filing their tax returns. That stress only gets worse with all the calculations and paperwork involved in submitting their earnings and deductions. So what four common mistakes you should avoid?

1. Missing errors from previous years

Think you might have missed a tax credit or refund that you could have claimed in the past? It’s worth giving it a second look.

  • You can go back as far as ten years and file an adjustment. It’s easy to do and you can even do it online, from your computer.

2. Misunderstanding capital losses

A lot of people don’t fully understand how investments are taxed, and it’s helpful to do some research to learn more because there are a lot of savings to be had and a lot mistakes that can easily be made.

  • For example, if you’ve had any losses on your investments, reporting them can help you out when you file your taxes.
  • You can use your losses to erase capital gains of the current tax year.
  • If you don’t have any gains this year, don’t worry, you can save your unapplied losses and use them for future gains indefinitely, or for gains three years prior.

3. Not claiming moving expenses

Many Canadians aren’t aware of that they can claim moving expenses under certain circumstances. If you’re eligible, moving expenses could be your most lucrative deduction of the year and you don’t want to miss out.

  • Expenses that qualify include real estate commissions that can be very high.
  • Don’t forget to keep your receipts because moving expenses are subject to audits.
  • To qualify, you have to move at least 40 kilometres closer to a new work or business location.

4. Losing receipts

Saving your receipts for tax time can be a big organizational undertaking, but it’s one of the most important things you can do to save yourself money and avoid making a mistake on your tax return.

  • Do you have system for keeping track of your receipts? If not, there are simple ways you can start managing them better, like carrying a separate wallet or zip-up for receipts.
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