Common Mistakes to Avoid When Filing Personal Taxes in Alberta

Author : Akshay Tiwari | Published On : 28 Nov 2024

Filing your personal taxes can feel overwhelming, especially with tax season approaching in Alberta. But by staying informed & avoiding common mistakes, you can make sure your tax return is filed correctly, helping you get the biggest refund or reduce any owed amount, here we share some of the most common mistakes to avoid when filing personal taxes in Alberta.

1. Missing Important Deductions and Credits

One of the easiest ways to miss out on potential savings is by overlooking eligible deductions and credits. In Alberta, taxpayers often forget to claim common deductions like medical expenses, charitable donations, and childcare expenses. It’s crucial to review your tax situation carefully and claim all deductions you're eligible for to avoid overpaying.

2. Not Keeping Track of Receipts and Documentation

Many people fail to keep receipts or other documentation for their claims, which can lead to rejected deductions or credits. In Alberta, keeping proper records of your expenses throughout the year is essential, particularly if you're self-employed or claim specific employment expenses. Organize your receipts and ensure you have supporting documentation for every deduction to back up your claims.

3. Failing to File on Time

Procrastination is a common mistake that can lead to penalties. The deadline for personal tax filing in Alberta is typically April 30th unless you or your spouse is self-employed, in which case it’s June 15th. Missing the deadline can result in penalties, and if you owe taxes, you'll start accumulating daily interest. Avoid this by setting reminders and organizing your documents in advance to ensure timely submission.

4. Not Updating Information with the CRA

Ensure that your personal information, including your address, phone number, and marital status, is up-to-date with the Canada Revenue Agency (CRA). If the CRA cannot reach you or send your Notice of Assessment to the correct address, it can cause unnecessary delays and confusion. Updating your information is also important for receiving government benefits like the Canada Child Benefit (CCB) or GST/HST credits.

5. Ignoring Taxable Benefits

If you received government benefits, such as the Canada Emergency Response Benefit (CERB), be sure to include them in your tax return, these benefits are taxable, and failing to report them can result in penalties. Keep track of all benefits received during the year, as they must be included in your income for tax purposes.

6. Not Filing the Correct Forms

Filing the wrong forms or failing to submit additional required forms can lead to fines or missed opportunities for deductions. For example, if you own foreign property worth over 0,000, the T1135 form must be filed to avoid penalties. Be sure to check if there are any additional forms you need to submit based on your financial situation.

7. Ignoring Tax Planning Opportunities

Not using tax planning strategies can result in paying more taxes than needed, think about chatting with a tax expert to find ways to reduce what you owe, like income splitting, putting money into retirement accounts, or using tax-free savings accounts. A bit of planning can save you a good amount of money.

8. Not Correcting Past Mistakes

If you discover an error after submitting your tax return, don’t panic. You can correct mistakes by filing an adjustment request with the CRA. Whether it’s an overlooked deduction or incorrect income reporting, it’s better to fix the issue than ignore it and risk penalties later.

9. Overlooking Self-Employed Deductions

If you’re self-employed, many expenses can be deducted to lower your taxable income, such as home office expenses, vehicle costs, and business-related supplies. However, mistakes in categorizing personal versus business expenses are common. Make sure that you accurately distinguish between personal and business expenses, as incorrect claims can trigger audits or penalties.

10. Not Seeking Help When Needed

Tax filing doesn’t have to be a solo venture. If you’re unsure about any aspect of your personal tax filing in Alberta, consulting a professional can save you time and stress, a qualified tax expert can help you navigate the complexities of your return, ensuring that everything is filed correctly.

Conclusion

Personal tax filing in Alberta can be tricky, but avoiding common mistakes will ensure you don’t overpay or face penalties, by claiming all eligible deductions, staying on top of deadlines, keeping thorough records, and seeking professional help when needed, you’ll set yourself up for a smooth and stress-free tax season. Don’t forget that a little preparation today can lead to bigger savings tomorrow.