Common Mistakes People Make When Filing Their Own Taxes

A tax firm is a company that assists individuals or business owners with tax filings and tax problems. These companies offer the expertise of an accountant whom can provide this assistance by filing income taxes, reviewingthe owed taxes, advising on how anything owed can be repaid and teaching techniques on how to avoid tax penalties. Most of these firms employ tax professionals or tax attorneys, accountants, former CRA agents or even enrolled agents. The purpose of the tax firm is to help conquer tax problems and fix them, and not to create more financial burden for the client. When it comes to tax filing difficulties, there a few common mistakes these tax firms see regularly.

You can recover and regain missed tax refunds by completing an adjustment to prior returns up to ten years back. Remember that it is also possible to fix errors from prior years. Report all income as soon as possible and always avoid the underground economy. If you work in the retail, hotel, restaurant, or construction industry, the CRA is more likely to ask to see your books because it has been statistically shown that individuals in these professions are more likely to be involved in the underground economy. If the CRA requests to verify any filings, you must comply and it is always best to have accurate and legal documents to show them all deduction claims and prove all income earned.

Another tax trap that people often fall into involves flipping homes. If you buy a home for your primary residence and choose to sell it the following year, the capital gain is tax free. However, if you choose to make a career out of flipping houses, you could now be facing a tax problem. If the CRA sees that you are buying and selling too often, they will consider any profit to be income, which will now be required to be reported at tax time. If you are unsure if you will have to report housing sale profits, the best course of action is to make an appointment with a tax firm for guidance on how to proceed.

Many people miss claiming their safety deposit box as part of their income. Of course it isn’t the most efficient, but it is still money andit’sa highly missed tax deduction. It would be wise for investors to review all statement summaries from their financial institutions to re-ensure interest costs and brokerage fees are included. When it comes to tax time, do not wait or hesitate to find tax preparation help in Canada, such as the expert team at Tax911 Now!They are experts in their field and have in-depth knowledge of the tax system and how it works. They really are the best resource you will find when you encounter tax questions or problems.

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