Two things are certain when it comes to filing your annual taxes with the Canada Revenue Agency: one, the ever-changing tax laws, which makes it virtually impossible to keep up with the latest credits and deductions, and two, the fact that you have to give up valuable personal time to file your taxes, every single year.

Canadians might love to get a tax refund, but the paperwork and time needed to do the return is another, frustrating issue. This might explain why so many Canadians make costly mistakes when filing their tax return.

If you want to maximize your tax savings and minimize your tax obligation, avoid these common errors on your Canadian income tax return.

Filing Your Taxes Late

When it comes to the CRA, it’s best to play by the rules. This includes filing your taxes on time. The final date for filing your income taxes is April 30. If you’re self-employed it’s June 15, but you still need to pay off any taxes that you owe by April 30.

The CRA does not take kindly to those who file their taxes late. They can hit you with a penalty of five percent of the balance owing plus an additional one percent for every month you’re late. Being consistently late with your taxes is even more costly. If you’ve paid a late-filing penalty over the past three years, you will be charged a 10% penalty on your balancing owing plus two percent for every month you’re late.

Claiming Ineligible Tax Benefits

Everyone loves to take advantage of tax deductions; after all, they help lower your taxable income. Unfortunately, some Canadians make claims for deductions or credits that either do not exist or that they are ineligible for.

Here are some examples:

Moving Expenses

If you’ve moved to be closer to work or to study, you can claim moving expenses. But there is a catch, the move has to be at least 40 km closer to your work or school. And not all moving expenses are deductible. You can claim transportation and storage, travel expenses, utility hookups and disconnection, and fees for cancelling a lease. You cannot claim costs associated with home staging, repairs to your old home, housing hunting, job hunting, temporary accommodation, or mail-forwarding charges.

Interest on Student Loans

If you’re a student, the CRA says you can claim the interest you paid on certain student loans. But you can make this claim only once, and it has to be used for student loans. You cannot deduct interest on personal loans, student lines of credit, or foreign student loans.

Tuition, Textbooks, and Other Education-Related Amounts

It’s expensive to be a student. And while the CRA assists with interest on student loans, their help doesn’t extend much beyond that. Still, some students try to claim fees that are not eligible for tax deductions. This includes claiming tuition fees from a school that is not recognized, textbooks, meals, lodging, extracurricular activities, and items of lasting value that you will keep after you’ve graduated, like a computer.

Medical Expenses

There are a lot of medical expenses you can claim every year on your income taxes. But there are also a lot of medical expenses that might seem like they should be eligible but aren’t. You cannot claim expenses related to alternative health practitioners (those not recognized by your provincial authority), vitamins, supplements, over-the-counter medicine, bandages, rubbing alcohol, or non-hospital beds.

Not Keeping Valid Receipts

The vast majority of Canadians file their taxes online. That means you do not need to send in receipts for items you make claims on. But you still need to keep all of those receipts handy. The CRA could ask to see them and if you don’t have them, you don’t get to make the deduction. Make sure the dates and amount on every receipt is accurate and supports your claim.

Failing to Report a Common-Law Living Arrangement

If you and your partner have been living together for at least 12-months, the CRA views you as being in a common-law relationship. And as far as the CRA is concerned, you are entitled to the same tax breaks as someone who is legally married.

What are some of the benefits of saying you’re in a common-law relationship? The CRA looks at the total earnings of a common-law partnership to determine whether or not you’re eligible for certain government benefits or tax credits, and who should claim them.

As a common-law partner, you may be able to:

  • Contribute to a spousal RRSP
  • Claim the $5,000 Home Buyers tax credit amount or split it with your partner
  • Combine receipts, including charitable donation and medical expenses
  • Claim both your provincial and federal spouse or common-law partner amount tax credit if you supported your partner financially

You might also be able to transfer credits you don’t use to your partner, which helps lower the amount of tax they pay. This includes:

  • Age credit (if they’re over 65 years of age)
  • Pension income payment amounts
  • Disability Tax Credit—Free Tax Filing Software for Canadians

The best way for Canadians to lower their taxable income is to have a comprehensive understanding of Canada’s tax law, which is tough since the CRA changes its tax law every year. You don’t need to worry about that, though, when you use the free tax software from Our online tax filing software ensures you are aware of and receive all of the deductions and tax credits you deserve.

Since 2011, tens of thousands of Canadians have used to file their online CRA Netfile advanced tax software. It’s the most convenient, fast, and affordable way to file your personal income tax return.

Certified by the CRA, we offer a variety of different products: a web application that allows you to submit your tax return online, without the need to download any software and a mobile app (eFile Canadian Tax Return) for all mobile platforms (Android, Apple, and Windows).

Our tax programs are easy to understand, the platforms are easy to use, and our customers get their tax refund back within 10 days. If you’re having difficulties, reach out to use, we’re happy to help our customers in any way possible.

To learn more about how can help simplify your personal income tax process, contact us today.