Doing your taxes? Avoid these common pitfalls
(NC) Tax season is a headache for many of us, but it doesn’t have to be. With a bit of planning and learning, you can file your return on time without much of a hassle. To stay on top of your taxes and avoid paying unnecessary fees and penalties, check out these common pitfalls:
Not visiting a pro. You don’t need to see an accountant to file your taxes, but if you encounter a deal that seems too good to be true, don’t be afraid to seek independent advice from a reputable tax professional. Ask questions or enquire further before submitting your return.
Falling prey to a promoter. Tax scheme promoters encourage or sell plans that seek to break or bend the rules of Canadian tax laws. They deliberately make false statements to assist their clients in tax cheating, all the while obtaining a financial benefit. But agreeing to these schemes can end up making you pay more in taxes or lead to penalties and even jail time.
Signing up for false claims. Stay away from tax preparers who offer to use false tax claims such as charitable donations, child care expense claims, or even business expenses or losses. There are serious consequences that just aren’t worth the risk.
Not getting a second opinion. Tax scheme promoters are often personable, charming and professional. But they will discourage you from double checking what they tell you with the Canada Revenue Agency (CRA) or someone else. Get that second opinion anyway, especially if you are feeling pressured.
Not disclosing past errors. The CRA encourages taxpayers who willingly participated in a past tax scheme to come forward and correct their affairs through the Voluntary Disclosures Program. Through it, you will only have to pay any taxes owing plus interest in part or in full, and would be eligible for relief from prosecution and, in some cases, from penalties.
Find more information at canada.ca/tax-schemes.