Below are some common red flags made by Canadians time and time again.
7 Ways to Draw More Scrutiny From the CRA:
- Not reporting all your income. Not only will you get reassessed but also potentially incur further penalties for failing to report.
- Not providing requested information. Ignoring repeated requests will get you reassessed giving way to the possibility of getting the claim denied completely.
- Inconsistency. CRA’s computers actively search for any major or unusual changes.
- Claiming 100% business use for a vehicle. The CRA wants to ensure that a personal benefit is taxed properly.
- Having your own business. CRA has industry profiles which to draw from. Over reporting expenses will draw suspicion.
- Claiming rental loss again. Claiming a loss repeatedly for a number of years may be looked upon as just trying to reduce your other income.
- Large home office deductions. Only make claims where you exclusively and regularly use for business purposes.
If you found that you have made an error it’s not too late to take the necessary steps to correct it. Catching your mistake before the CRA does is always a much better scenario.
If you feel a little unsure in how to sort out and minimize your taxes, schedule a call with us today.