Taxes are daunting, and errors may cost you lots of money. Most people commit tax mistakes because they lack knowledge about tax regulations or ignore specific steps. Oakville accounting specialist can be a great help to you in escaping such situations. Here are some tax errors that most commonly occur, and the steps for preventing such errors.
1. Not Filing Taxes on Time
A great mistake is to miss the tax filing deadline. In Canada, the deadline for most people is April 30. Filing late may lead to you having to pay fines, and the tax you did not pay will accrue interest. A CPA in Canada will support you in always being on target and filing on time, so you do not pay any additional fees.
2. Forgetting to Claim Deductions
Deductions reduce the amount of taxable income. Many people ignore the claim of deductions for medical and dental expenses and contributions, or forget these completely. Tax planning accountants will comb through your financial records to get the maximum deductions possible, helping you save more money.
3. Incorrect Information
If you input totally incorrect data, let’s say the issue of income or Social Insurance Number, you may find yourself in a late refund or even get a summons for further check or audit. A professional accountant in Oakville is a person who goes through the forms with the eye of a hawk to make sure everything is in order.
4. Not Reporting All Income
Some people forget and do not report extra income, such as profits from side jobs and investments. The Canada Revenue Agency (CRA) receives information from the bosses and the banks, so they can tell if you have not included some income in your tax return. Chartered accountants in Canada can ensure you follow all income reporting rules to avoid penalties.
5. Mixing Personal and Business Expenses
If you are a business owner, you must ensure ample and clear separation between personal and business expenses to avoid tax troubles. You will likely make tax filing errors when these funds are mixed up. Chartered accountants’ role is to structure your money efficiently and, simultaneously, help you claim only the valid business expenses, thus cutting errors.
6. Not Keeping Records
It is also necessary to keep your receipts, invoices, and other records for at least six years in case the CRA requires them. Without records, you may fail to take advantage of certain deductions or encounter an auditing problem. A professional accountant in Oakville can provide a perfect system to track and store your records easily.
7. Ignoring Tax Credits
Tax credits reduce the amount of tax you owe. One common thing that makes people miss out on these incentives is their unawareness of credits such as the Canada Child Benefit or tuition credits. A tax planning chartered accountant is the person who knows all the credits for you and sees that you don’t miss any of them.
8. Trying to Do It All Alone
Taxes are so complicated, and if you do them by yourself, there is a high possibility that you will make errors, which will lead to double work. Without the support of the experts, there is also a probability of committing mistakes, i.e., you can pay too much or too little in taxes, and both situations can make you lose money. The role of chartered accountants is to provide you with the necessary assistance, thus maximizing the whole process’s efficiency, accuracy, and savings.
Final thoughts
Indeed, a professional accountant in Oakville can be your saving grace, saving you tons of time, anxiety, and money. Apart from mastering the complicated tax rules, they keep themselves updated with any tax law changes in Canada. The likely consequences to taxpayers working without chartered accountants for tax planning include costly mistakes and losing the chance of getting the maximum amount of the tax return.
