Not keeping personal information up to date – It’s important to tell the CRA as soon as possible about any change in your address or your direct deposit details. You’re also required by law to tell the CRA about any changes to your marital status.
Not reporting all income – Make sure you report your income from all sources including:
- tips
- gratuities
- a temporary job (such as freelancing or contract work)
- a part-time job
- income from the sharing economy or an online business
- foreign income (including interest and other income from investments held outside Canada)
Be sure to report all income you earn whether you receive it in cash, or it’s reported as income on your T4 or other slips.
Not supporting income and expense claims – If you’re a sole proprietor or self-employed, make sure you keep good records to support the income and expenses you are claiming on your return. It is also very important to ensure the expenses are clearly identified as related to your business vs. personal. Make sure the expenses clearly relate to business. For example, an insurance agent cannot expense shampoo, since it doesn’t’ relate to the business of insurance. On the other hand, a hairdresser can definitely expense shampoo since it is a direct input into his or her work.
Making an incorrect claim – Various non-deductible amounts, such as funeral and wedding expenses, loans to family members, and a loss on the sale of a principal residence are sometimes incorrectly claimed.
Missing to file or Late filing of Form T1135, Foreign Income Verification Statement: If you own or hold specified foreign property where the total cost amount of all such property, at any time in the year, was more than CAN$100,000, you have to file Form T1135 by the due date of your income tax return, even if the income tax return is not required to be filed. There are substantial penalties for not filing Form T1135 by the due date, or for making a false statement or omission with respect to the required information.