2018 Canada Tax Tips

Myth 1

If I make a mistake on my tax return, the CRA will correct it for me. The Canada Revenue Agency will correct mathematical errors and add income that you may have missed on your return. However, if you miss credits or deductions, or if you do not transfer amounts to your best advantage, the CRA is not obligated to correct the return.


Myth 2

All NETFILE-certified tax software is of the same quality.This is false. The CRA testing for NETFILE does not grade the quality of the software, but rather its ability to create a .tax file that can be read by its systems. Certain criteria must be met, but these do not apply to user-friendliness or the ability to find deductions to get the best possible result.     
Myth 3   

I don't earn enough money to pay income tax, so I don't need to file a tax return. Even low-income earners can benefit from filing using an online tax software like UFile. Don't miss out on (potentially) thousands of dollars in benefits and credits, like the GST/HST credit and the Canada Child Tax Benefit. You must file a return to be eligible.

Low-income seniors who qualify for the Guaranteed Income Supplement should also file to ensure that they continue to get the supplement. This same logic applies to low-income earners who received the Working Income Tax Benefit payments last year and have to file a 2016 return to be eligible to receive them in 2017. There are also some sales and property tax credits provided by some provinces, but you need to file your return to receive them.

Teenagers who earned a few thousand dollars doing odd jobs should also file a return, because that creates RRSP contribution room (even if they didn't contribute to an RRSP). That unused contribution room can be carried forward indefinitely at a later date.   

Myth 4   

If I don't have the money to pay what I owe the government, I shouldn't file before the April 30 deadline. Even if you don't have the money to pay the taxes owing by April 30, use a software like UFile to file on time anyway and pay later. The Canada Revenue Agency imposes a five per cent penalty for late filing, not for paying late. "Interest will accrue on the unpaid balance, but the penalty will not apply," advises KPMG.

Myth 5

I don't need to bother claiming any tuition-related tax credits, since I didn't make enough money to owe any tax. Students who don't need to use the tuition tax credit, the education amount or the textbook tax credit can still transfer those credits to their spouse, common law partner, or a parent or grandparent.

Myth 6

I can't file my tax return because I'm still missing a T4 slip. You should have received all of your employment-related income slips by the end of February. If you never received a slip, or if you threw it out by accident, you should contact whoever issued it and ask for a duplicate. Whatever you do, don't wait so long that you pay the five per cent late filing penalty that kicks in after April 30. Estimate the amount and attach a note to your return. State that you were unable to get your slip and provide the name and address of who should have given you that slip.

Myth 7

I can file my tax return through the Internet, but it's impossible to pay electronically. Paying what you owe to the government electronically used to be impossible, but electronic payment is easy these days. As of the 2009 tax year, taxpayers will also be able to remit amounts owing to the CRA through the department's new My Payment feature.

Myth 8

Once I receive my refund, I no longer need to keep the supporting documents. The Canada Revenue Agency will initially assess your return without receipts or supporting documents, but they have the right to review your return and ask for documents or look for errors such as unreported income or miscalculated transfers. You may still be asked to provide supporting documents, so be sure to keep all slips and receipts in case the CRA requests proof.

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