Can I claim this? Top tax myths debunked.
May 28, 2021
Taxes can be confusing, we know. H&R Block is here to help you figure out what’s fact and what’s fiction so you can avoid mistakes and get the most out of your return.
Myth #1: If you receive a refund or Notice of Assessment (NOA) after filing, it means you won’t be hearing from the government about this return again.
Many Canadians believe that the moment they file their return is the moment they can stop thinking about taxes for another year. Unfortunately, that’s not the case. In fact, a filed return can still be assessed a number of times by either the Canada Revenue Agency (CRA) or Revenu Québec to make sure it’s accurate.
Be sure to keep all your documents for at least 6 years – the CRA and Revenu Québec can request to see them at any time if your return is selected for a detailed review. If your return is reviewed, the government might send you a Notice of Reassessment showing changes made to your refund or a new amount of taxes you owe.
Myth #2: If you’ve received your NOA, it’s too late to change your tax return.
If you have the paperwork to support your claims, you can go back up to 10 years to request adjustments to claim credits and deductions you might have missed before. Plus, there’s no time limit on adding income to your past returns.
For example, let’s say you found old donation slips that forgot to claim. Or, you found an income slip (such as a T4, T4A, or T5) that you missed reporting. You can file a federal adjustment request (T1) form, and/or a Québec request for an adjustment to an income tax return (TP-1.R-V) form, and sort out your tax situation.
Myth #3: You don’t have to worry about information slips that were mailed to the wrong address.
No matter where they’re sent, you’re responsible for your information slips. If you forget to report your information slips twice in a 4 year period, you’ll face penalties, and your return will be audited.
To avoid missing information slips, make sure you let the CRA and Revenu Québec (if applicable) know as soon as possible when you move. Visit the H&R Block Online Help Centre to learn how to change your mailing address.
You can also access all your information slips online by registering for a CRA My Account, and if you’re a Québec resident, Revenu Québec’s My Account for Individuals.
Myth #4: If you worked outside of Canada, you don’t have to file a Canadian return.
If you went to school or worked outside of the country but you have significant residential ties to Canada (such as a home, spouse, or dependants in Canada), you’ll need to file a Canadian return.
Even if you don’t have significant ties, you might still need to file a Canadian return if you have a lot of secondary residential ties. Secondary ties include:
- Personal property in Canada (for example, a car, furniture, etc.);
- Social ties (for example, memberships in recreational or religious organizations in Canada);
- Bank accounts or credit cards issued in Canada;
- A Canadian driver’s license;
- A Canadian passport; or
- Health insurance with a Canadian province or territory.
To learn more about your status as a Canadian resident and how it might impact your tax situation, visit the CRA website or call H&R Block for live support.
Myth #5: If you earned less than $10,000, you don’t have to file a return.
If you’re not reporting much income this year (or even none at all), you should still file a return. Filing your return means getting access to great federal and provincial benefits. Check out this blog to learn more about why you should file your return if you earned a small amount of income.
Myth #6: Tips aren’t taxable.
One of the most common tax mistakes is not accounting for all the cash you earned (that’s right, tips are taxable!). Unclaimed income can result in significant penalties, and information missing from your return can be costly. If you’re working in the hospitality industry or get tips through your side gig, make sure you record what you earn and report it on your return.
Myth #7: Maternity leave benefits aren’t considered taxable income.
Any Employment Insurance (EI) special benefits you receive, including maternity and parental leave benefits, are considered taxable income and need to be reported on your return. But don’t worry - you’ll receive a T4E slip, and a T4E(Q) slip if you’re a resident of Québec, showing the employment insurance you received or repaid this year, and that will help you figure out how much tax you owe.
Myth #8: You can write off anything if you worked for yourself.
You might be able to claim some of your business expenses to reduce the taxes you owe. However, these expenses must be work-related, meaning you won’t be able to claim personal expenses. For example, you can’t claim the cost of dry cleaning or hair styling products that you used for yourself, even if you needed to look presentable for your business.
To learn more about the types of expenses you can claim if you worked for yourself, check out this blog on tax tips for self-employed workers and this blog on tax relief for small business owners.
Myth #9: Your pets are considered dependants, so you can write off their pet food.
Unfortunately, most Canadians can't claim their pets as dependants on their return. Having said that, you might be able to claim the cost of owning an animal if you:
- have a specially trained service animal (meaning caring for your pet is considered a medical expense) or
- are a farmer and you have raised livestock for business purposes or raised outdoor animals to protect your crops.
Visit the H&R Block Online Help Centre to learn more about claiming your pets on your return.
Have questions about your tax situation? Ready to file? Get help from the largest network of reliable Tax Experts by choosing one of four convenient ways to file: File in an Office, Drop-off at an Office, Remote Tax Expert, or Do It Yourself Tax Software.