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Top 10 Reasons for an Adjustment to Your Tax Return

small businessesStarting 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.

Some Stats on Efiles


2012 Tax Year

% change from 2011

EFILE Returns






EFILE Certified Software



Registered EFILERs



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.

  1. Other Employment Expenses
    Ineligible expense such as supplies and work space in home.
  1. Public Transit
    Single ride passes are not eligible. Keep your monthly passes as proof.
  1. Other Deductions
    Specifically legal expenses for spousal support not eligible.
  1. Moving Expenses
    Temporary moves not eligible nor are personal expenses.
  1. Medical Expenses for Other Dependants
    Keep all receipts. Under certain circumstance you can’t claim medical expenses and the Disability Tax Credit.
  1. Infirm Dependants 18 or Older
    Ensure you consider the net income when calculating the claim
  1. 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
  1. Interest Paid On Student Loans
    Ineligible receipts or loan not eligible
  1. Education Amount
    The number of months claimed must agree with the number of months indicated on the corresponding T slip
  1. 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.