It pays off in more than a few ways to make sure you don't have any mistakes when you (or your preparer) file your tax return.
The tax office's computer (or online calculator) should correct any math errors. But if you make ineligible claims or submit the wrong (or no) documentation, that will hold up the processing of your return. And if the mistakes hint at an attempt - deliberate or otherwise - to evade tax, your file could be flagged for review in the future. So always check both the facts and also the figures on your return. Even if somebody else does your return, you are still responsible for its contents.
The Canada Revenue Agency lists the following most common mistakes:
- Public transit amount (Line 364 Schedule 1) - A copy of the transit pass wasn't sent. Or it was incomplete - name missing, signature illegible. Or the pass was ineligible: passenger doesn't qualify because of age, not enough trips in the month, interruptions in use. Or problems with the receipts: invalid, not all provided.
- Medical expenses (Lines 330 and 331 Schedule 1) - Ineligible items claimed like vitamins, natural supplements, over-the-counter medications, recliners, non-hospital beds, medical supplies like rubbing alcohol, bandages and shoe inserts; medical practitioners (massage, kinesiology, cosmetic) not recognized by the relevant provincial authority.
- Tuition, education, textbook amounts (Line 323 Schedule 1) - Invoice sent instead of receipt; course name not on receipt; incorrect counting of part-time and full-time months and credits; not a recognized institution.
- Student loans (Line 319 Schedule 1) - Ineligible loans cited (e.g. personal loans, student lines of credit, foreign student loans) or interest claimed more than once; unofficial receipts or no name on the documents.
- Moving expenses (Line 219) - Ineligible expenses claimed (e.g. house-hunting, job-hunting, mail-forwarding, temporary accommodation, storage fees near the former residence, repair costs).
As well as such missing or ineligible documentation, you might be making mistakes by not claiming eligible expenses. The CRA will sometimes include such a claim for you when it relates to other information on your return. But it's always better to be proactive - see my March 29 column.
Mike Grenby is a columnist and independent personal financial advisor; he'll answer questions in this column as space allows but cannot reply personally. Email [email protected]
