Did you get your maximum tax refund?
As part of the Million Dollar Neighbourhood reality TV show, H&R Block tax professionals did free Second Look reviews on more than 300 tax returns in the community of Aldergrove, B.C. The results showed that almost one third of participants had made errors on previous tax returns.
As millions of Notices of Assessment are delivered across Canada in the coming weeks, many taxpayers will glance at the paper and then forget about it until next April. But receiving your refund or NOA does not mean your tax return is right.
In our experience with Million Dollar Neighbourhood, errors on tax returns may be more common than you think. Out of the tax returns with errors that led to refunds, the average received back was $1,500. That is a significant amount of money hiding in your tax return.
Some of the mistakes made in Aldergrove include:
- Not claiming the amount for eligible dependant: Single parents with custody are allowed to claim the amount for eligible dependant which is sometimes referred to as the equivalent to spouse. The 2011 credit means about $1,580 in federal tax savings. You will also have provincial tax savings depending on your province of residence.
- Missing employment expenses: In most cases, you are allowed to claim the GST/HST rebate on your employment expenses if you have a signed T2200 Form (Declaration of Conditions of Employment)
- Not calculating capital gains accurately: Not calculating your capital gains properly can lead to a bigger tax bill than you actually need to pay. You can carry capital losses back three years if you had capital gains to offset them against in those years. Or you can carry forward your capital losses indefinitely until you have gains to claim them against.
If you have doubts or questions about your tax return, you can always come to H&R Block for a free Second Look review. A tax professional will review up to three years of returns prepared by someone else to see if you are missing out on any deductions or credits.
And if you do discover you have missed a credit, the money is not lost. You can always file a T1 Adjustment Request to amend your return. No one should overpay the government.