Common Tax Mistakes Canadians Make—and How to Avoid Them

Tax season can be stressful, and even small mistakes can lead to penalties, missed deductions, or delays. To help you file accurately and maximize your tax savings, here are six of the most common tax mistakes Canadians make—and how to avoid them.

1. Missing the Tax Filing Deadline

If you owe taxes and file late, the CRA charges a 5% penalty plus 1% per month on unpaid amounts. Even if you don’t owe, filing late can delay refunds and benefits.

How to Avoid It: Mark April 30, 2025 on your calendar and file early. If you’re self-employed, your filing deadline is June 15, 2025, but any taxes owed are still due by April 30.

2. Not Reporting All Income

Forgetting to report freelance, rental, investment, or gig work income can result in CRA reassessments or penalties. The CRA already receives most tax slips directly, so omissions won’t go unnoticed.

How to Avoid It: Gather all T4s, T5s, and self-employment income records before filing. Check your CRA My Account to ensure you don’t miss any slips.

3. Overlooking Tax Deductions & Credits

Many Canadians miss out on valuable deductions and credits, such as:

• RRSP contributions

• Medical expenses

• Childcare costs

• Home office expenses (for eligible remote workers and business owners)

How to Avoid It: Use tax software or work with an accountant to identify deductions you qualify for. Keep receipts and documentation to back up claims.

4. Overcontributing to RRSPs or TFSAs

If you exceed your RRSP or TFSA limits, you could face a 1% penalty per month on the excess amount. Early RRSP withdrawals also come with withholding taxes and lost contribution room.

How to Avoid It: Check your RRSP and TFSA limits in your CRA My Account before contributing.

5. Not Keeping Proper Records

The CRA can request tax documentation for up to six years. If you can’t provide receipts or proof of expenses, you may have to repay deductions or face penalties.

How to Avoid It: Store tax records, receipts, and supporting documents digitally or in a safe place for easy access if needed.

6. Ignoring CRA Notices or Requests

Failing to respond to CRA requests for more information can lead to delays, reassessments, or audits.

How to Avoid It: Always open CRA mail and respond promptly. If you’re unsure how to proceed, consult your accountant before replying.

Get Expert Help This Tax Season!

Filing taxes correctly can save you time, stress, and money. If you need help avoiding mistakes and maximizing your refund, contact us today—let’s get your taxes done right!