Top 10 Reasons for an Adjustment to Your Tax Return

Last updated: Jan. 29, 2014

Starting last year with 2012 tax returns, CRA mandated that all tax preparers electronically file all T1 (Individual) and T2 (Corporate) tax returns.

The number of electronic filed tax returns continues to grow and now accounts for 76% of all T1 returns filed.

Electronically filing decreases the process time and provides for faster receipt if you’re owed a refund.

The downside of electronic filing is the ease of reviewing data resulting in an increased rate of pre-assessment and processing reviews of returns.

CRA performs reviews to ensure that amounts are reported correctly and that they are properly supported.

10 Categories with the Highest Rate of Non-Compliance

The following have the highest rate of non-compliance and were the top 10 reasons for an adjustment to a return.

Other Employment Expenses
Ineligible expense such as supplies and work space in home.

Public Transit
Single ride passes are not eligible. Keep your monthly passes as proof.

Other Deductions
Specifically legal expenses for spousal support not eligible.

Medical Expenses for Other Dependants
Keep all receipts. Under certain circumstance you can’t claim medical expenses and the Disability Tax Credit.

Infirm Dependants 18 or Older
Ensure you consider the net income when calculating the claim

Medical Expenses for Self, Partner or Child
A doctor’s note may be required in some instances (e.g., travel for medical expenses). Also many claims are for non-recognized or non-medical therapies

Education Amount
The number of months claimed must agree with the number of months indicated on the corresponding T slip

Additional Deductions
Be aware of any non-standard deductions and ensure you keep all your receipts and supporting documents

Watch for these on your tax return and ensure you have the required forms and receipts and that you’re claiming them appropriately.