Expert answers most-asked tax season questions for Canadians

It’s almost the end of tax season in Canada.

This time of year can feel overwhelming for Canadians, but do not worry — Daily Hive has you covered.

We spoke with H&R Block tax expert Yannick Lemay about his clients’ most-asked tax season questions.

From updates about the tax system to fixing errors on your return and learning about how a change in marital status could impact your taxes, here are all the answers in one article to save you from opening multiple Google tabs.

1. What are the new tax changes this year I should know about? 

There are several updates the Canada Revenue Agency (CRA) has made that could affect what you can claim and how much you can get on your return.

From temporary relief payment for the Home Buyers’ Plan to changes to rules surrounding deducting expenses for short-term rentals, check out our guide on tax changes.

2. What are some of the biggest mistakes one could make filing during tax season? 

Lemay says key mistakes include providing incorrect or incomplete information, omitting income, overlooking available deductions and credits (there are more than 400 available to Canadians!), and failing to report changes in marital status.

He added that if you don’t file on time, late filing penalties may apply, with a penalty of five per cent of any balance owing, plus one per cent for each full month the return is late, up to 12 months. Penalties can be higher if you have already filed a late return in the previous years.

3. How can I reduce what I owe on my tax return? 

• Maximize contributions to your Registered Retirement Savings Plan (RRSP) for tax-efficient retirement savings and income reduction. 
• Leverage education credits, particularly the federal tuition tax credit, to offset tuition fees paid for post-secondary education. 
• Optimize charitable donations. Tax savings are higher when your combined charitable donations exceed $200. You can combine your receipts from the last five years if you didn’t claim them previously.
• Remember to include unreimbursed medical expenses in your tax returns for potential deductions.

4. How long does it take to get my refund? 

According to Lemay, taxpayers filing online with direct deposit may receive refunds in as little as eight business days, while paper returns could take up to eight weeks to process.

He added that if you qualify, you can receive your refund the same day you file your tax return with H&R Block Instant Refund.

5. How can I fix any errors made on my return? 

Did you make a mistake on your return this tax season? No need to stress.

“When you get your Notice of Assessment back from the CRA, adjust the line items that were wrong,” explained Lemay. “Avoid filing a new return unless instructed to do so, which you’d do under subsection 152(7) of the Income Tax Act.”

6. My workplace has implemented a hybrid working model. How does that impact my taxes? 

Remote work deductions are still available, with revised criteria including needing a signed T2200 form from your employer. You must also meet specific home office usage requirements, says Lemay.

“This is because the simplified form that was established during COVID-19 lockdowns (known as T2200S) is no longer available,” he explained. “Though that might mean more calculations for people claiming a home office, it might also result in a bigger deduction!”

7. How can I reduce taxes on my investment income?

Lemay advises contributing to your Tax-Free Savings Account (TFSA) so the investment income you earn is accumulated tax-free. 

In 2023, if you were at least 18 years old, you could contribute $6,500 to your TFSA account. In 2024, this limit increased to $7,000, but the time to contribute is already over (Dec. 31, 2024).

8. Which should I choose between RRSP and TFSA? 

Deciding where to put your money between a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA) depends on many factors, especially your income, says Lemay.

If you earn more, putting money into RRSPs can help lower taxes. If you earn less, using TFSAs might be better, saving RRSPs for later when you earn more.

9. My marital status has changed over the past year. How does that impact my taxes? 

If you get married and live together for a year, you must file taxes together, advises Lemay.

Even though you submit separate forms, some tax benefits are based on your combined family income, such as the Canada Carbon Rebate. 

This article was originally published on Feb. 27, 2024. It has since been updated.

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