Taxation in Canada, and more specifically in Quebec, can sometimes seem complex and confusing. As tax lawyers in Montreal, we regularly encounter situations where mistakes, often avoidable, unnecessarily complicate the tax situation of individuals and businesses. Here are the most common mistakes and our advice on how to prevent them.
1. Forgetting to declare certain income
The Canada Revenue Agency (CRA) and Revenu Québec require that all income be reported, including rental income, capital gains, and even income from platforms like Airbnb. Failure to report these amounts can result in significant penalties. Tip: Keep all your statements and make sure your returns are complete.
2. Missing payment deadlines
Whether it's for income tax or GST/QST, missing deadlines can result in late fees and interest. Tip: Write down key dates in your diary and consider a pre-authorized payment plan to avoid forgetting.
3. Confusion over deductible expenses
Small businesses and self-employed individuals often make mistakes when deducting certain expenses, such as including ineligible personal expenses. Tip: Consult a tax attorney or accountant to clarify what is deductible in your industry.
4. Ignore assessment notices
Many taxpayers ignore notices from the CRA or Revenu Québec, believing them to be minor errors. However, an uncontested notice quickly becomes final. Tip: React quickly by consulting a lawyer to contest or negotiate if necessary.
5. Not planning for tax obligations in the event of death
Poor estate planning can have significant tax implications for your heirs. Tip: Work with an expert to structure your estate to minimize taxes when it comes time to pass it on.
Taxation is an area where proactivity is essential. At Twin Lisbet, we help our clients navigate the Canadian tax system with confidence and precision.
Comments