Tax season is that time of the year when the accounting and tax services in Cambridge become active again and you need to take out all your accounting and tax reports as well as fill out the tax forms too. Do you wish to boost your tax returns and stay away from the most common mistakes that can happen while filing income tax returns? Or you have already filed your tax return and recently realized a blunder you made while filing them. You need not stress over, As professional tax accountants, we have curated a list of mistakes that might happen while filing your tax return or how to rectify them.
Filing and documenting Tax returns won’t be just simple as it appears. It is a tricky procedure and it’s likely possible to make a mistake at your fingertips while doing so. On certain occasions, your mistake might bring about greater taxation issues than what you expected or cancellation of your tax breaks. Or even a mistake in tax filing can bring about retribution or additional penalty charges. Below is a list of the most common mistakes on tax returns. However, we have also included information on how you can correct the mistakes that you have already made after filing your tax return.
1. Overlooking Deductions or Credits that are Acceptable:
One of the difficult taxes of managing a business is to track and keep the record of the income tax deductions and credits that you may be eligible for year to year, especially when the Law administration changes tax rules and offers subsidies and consolations based on the pandemic situation. It is good to look up Cambridge tax and accounting services, and reach out to someone to see the specific deductions and credits that apply to you. Sometimes new allowances and tax credits are added and some are eliminated.
An Experienced personal tax accountant could guarantee that none of the deductions or credits that are relevant to you are forgotten or overlooked and can help in providing as much tax consolation as possible.
2. Proclaiming Ineligible Expenditures:
Sometimes, a person or any organization can make the mistake of claiming deductions or tax credits that is not eligible at present. As per CRA, Individuals often incorrectly claim wrong moving expenses. Therefore, it is always recommended by professional tax accountants to know about your tax credits and benefits before claiming any expenses.
3. Disposing of Receipts and Slips:
As online tax filing is turning out to be more feasible, taxpayers are not required to send in all the slips and receipts along with the returns, so they often neglect to keep them safe and convenient. This frequently turns into an issue since CRA frequently demands to see receipts for certain access like childcare costs, donations, educational expenses, etc.
People are expected to keep seven years of records and CRA just acknowledges receipts that include the date of payments. If one somehow fails to provide these documents then the claim is denied. This is where a CPA firm would help to maintain the digital copy even if the hard copies were lost.
4. Missing the Tax Deadline:
Tax filing deadlines were extended during the Covid pandemic, but they were reinstated in 2021 and 2022. For Canadians who are employed in 2021, the deadline is May 2, 2022, and for self-employed individuals, it is June 15, 2022. If you neglect to file on time:
- You won’t have a fair amount of money as a refund on time
- It could delay benefit payments
- You may face interest or a penalty
How Can You Change or Rectify Your Mistakes?
Taxpayers frequently commit errors in their tax filing and CRA knows about that. You can demand a change to a tax return file for the past 10 years. You need to hold on until you get your Notice of Assessment for that tax return and then file for a change request. It is like a notification given to all citizens by the CRA showing how much tax expenses should be paid or credited. Each change should be detailed with line numbers and figures. A different request should be petitioned for every year’s tax returns changes.
All essential records like the receipts and slips should be included. CRA normally answers within around fourteen days for online changes and around two months for mail. If the changes are approved you will get a Notice of Reassessment. If there arises an occurrence of rejection, you will get a letter explaining why the changes requested are not accepted. You can oppose the CRA’s choice by documenting a Notice of Objection. Furthermore, the CRA offers a program where you can adjust or change a previously filed return or file a previous year’s return that wasn’t filed. If you are planning to do so, the best way would be to let a professional tax return accountant handle it, who can guide you through the whole complete tax filing and tax compliance procedure as well as help you file them with zero to a minimal error rate
Best Way to Avoid a Mistake in Tax filing and Returns:
The least difficult response to this question is having a skilled tax accountant do your taxes. By hiring a personal tax accountant from one of the best accounting and tax services in Cambridge, Canada, you will not need to stress over missing out on any tax credit or deductions that apply to you, furthermore, your tax consultant will be able to help you apply for as much tax consolation as possible, resulting in a lesser tax burden.