“Taxes are all year round, not just in March.” Have you ever heard this phrase? Well, it’s no less true, since tax filing season can easily become a mess if you haven’t done your homework during the year. A look at the top four tax season oversights with national tax expert, Gerry Vittoratos.
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1. Not having all your documents in hand
It may seem trivial, but the biggest oversight observed by tax professionals and accountants in general is the simple fact of forgetting certain essential documents. In addition to the main statements such as the T4 (employment income) or the RL-31 (housing), many do not have the reflex to keep their receipts for medical expenses, for example.
“If you see your dentist today, the receipt is given to you immediately. But if you received this service in 2022, you will only be able to declare it next year. Do people archive these documents to file their tax return in 13-14 months? Usually not and that’s the problem, ”laments the national tax expert at UFile, Gerry Vittoratos.
Our expert’s trick: buy a file on January 1 and insert, throughout the year, all the receipts that are likely to be admissible in our next tax report. This includes, in particular, prescribed drugs, prescription glasses, visits to the dentist and even payments made to an insurer or a group insurance plan.
“Tax season isn’t just about T4s. These are all the expenses incurred during the year which are tax deductible but which do not appear on our slips,” recalls Mr. Vittoratos.
2. Missing out on tax deductions and credits
Did you know that there are over 75 deductions and over 50 tax credits in Quebec? It’s the same principle as the varieties of cheese here, but with a tax flavor.
An example: Are you a recent graduate and need to repay your student loan? You may not be familiar with the non-refundable tax credit for interest paid on a student loan. It significantly reduces the tax you have to pay on interest related to student financial assistance, for example.
Each year, take the time to read the and pay attention to changes in your tax situation. For example, if you became in 2021, there is a credit for that!
Otherwise, follow the and that of to not forget anything.
3. Not considering COVID benefits
This may be the oversight that could cost you the most in terms of deductions.
For the second year in a row, the federal and provincial authorities allow workers who have worked from home more than 50% of the time for a period of at least four consecutive weeks due to the pandemic to deduct $2 per workday up to to a maximum of $500.
This simplified method put in place with the pandemic is, as its name suggests, extremely simple and does not require any proof, unlike the method which allows workers to deduct their office expenses by taking into account the surface area of their workspace. .
Another reason to take advantage of it: last year, to cover expenses related to telework was $400 and has been revised to $500 for the 2021 and 2022 tax years.
4. Omitting to use certain deferred amounts
Have you ever heard of This is a very profitable tax trick and yet completely unknown to taxpayers.
Both in Quebec and at the federal level, a tax credit for tuition fees benefits students and their parents or grandparents who supervise them in their studies. The student has the option of transferring the unused portion of their tuition fees to them to reduce their taxes.
“A full-time student generally does not have a large income and therefore does not have to pay tax. But if he does not transfer his unused tuition fees to his parents, carryforward amounts accumulate in a bank and can be used later to calculate this credit,” explains tax expert Gerry Vittoratos.
A significant credit for a freshly graduated young professional who now has taxable income, for example.
“Deferrable tuition fees are an important oversight, because it’s really money that we leave aside,” recalls the expert.
To find out if you have pending carryforward amounts, consult your file and that of the.
To find out about all the new features for 2021 that apply to your Québec income tax return, consult this .