At tax time, make sure you’re reporting accurate information. Here are some common mistakes to watch out for.
On this page you’ll find
1. Claiming moving expenses already paid for
You can only claim moving expenses that your employer hasn’t already reimbursed you for. If you have been reimbursed for some or all of your moving expenses, you must include this as income on your tax return.
2. Under-reporting income
Make sure you are reporting income from all sources. This includes salaried income but also freelance income and some government benefits such as Employment Insurance (EI).
3. Incorrectly claiming interest paid on student loans
You can only claim interest on student loans made to you under the Canada Student Loans Act, the Canada Student Financial Assistance Act, Apprentice Loans Act, or similar provincial or territorial government laws. You can’t claim interest paid on any other kind of loan, even if it is to finance your education. Example: a line of credit. You can’t transfer the claim to anyone else, even if they paid the interest on the loan.
You can claim an amount only for interest you have not already claimed. If you have no tax payable for the year the interest is paid, it is to your advantage not to claim it on your return. You can carry the interest forward and apply it on your return for any of the next five years.
4. Claiming union dues when they’ve already been reimbursed
Your employer may withhold dues from your pay. This will be noted on your T4 slip and you can claim a corresponding deduction. You may also get a receipt for these dues from your union or association.
However, you can only claim the deduction once. If you have been reimbursed for dues paid, you cannot claim any of the dues as a deduction unless your employer has included them as a taxable benefit on your T4.
5. Other deductions (line 232)
You can only use line 232 to claim allowable amounts not deducted anywhere else on your return. You can’t use this line to claim personal or living expenses that are not legitimate tax deductions. Examples: funeral costs, wedding costs, legal fees paid for separation or divorce agreements.
Check out these tips on other mistakes to avoid.
Summary
Remember to avoid these 5 common mistakes when filing your tax return:
- Claiming moving expenses already paid for.
- Under-reporting income.
- Incorrectly claiming interest paid on student loans.
- Claiming union dues when they’ve already been reimbursed.
- Claiming personal or living expenses under other deductions (line 232).
