The most common CRA mistakes include missing deduction opportunities, reporting incorrect income amounts, forgetting to claim eligible dependents, and missing filing deadlines. Many filers also make errors with RRSP contributions, fail to report investment income, or don't maximize tax credits they qualify for. Being aware of these pitfalls can help you file accurately and potentially keep more money in your pocket when you file your 2026 tax return. Getting your income right is the foundation of an accurate tax return. Here's what trips people up: Missing T-slips: Employment income (T4), investment income (T5, T5008), rental income, and self-employment earnings all need to be reported. The CRA matches your return to information they already have from employers and financial institutions, so missing slips will be caught. Unreported cash income: Whether from side gigs, freelance work, or rental properties, all income must be reported. The CRA tracks this through bank deposits and cross-referencing. Investment income underreporting: Capital gains, dividends, and interest earned in non-registered accounts must all be included. If you're unsure how much you earned, use the Canadian Income Tax Calculator to estimate your tax liability. This is where many filers leave money on the table.
The CRA charges a late-filing penalty of 5% of any unpaid tax plus 1% per month (up to 12 months) if you miss the deadline. If you filed late in a previous year, the penalty rate doubles to 10% plus 2% per month. Filing early avoids this completely.
This CRA rule may apply to you if you worked from home due to COVID-19, your job location changed, or you're self-employed and use part of your home as an office. You can deduct a portion of rent, utilities, internet, property tax, and home insurance. Use the Home Office Deduction Calculator to see what's eligible.
Your RRSP contribution room is calculated based on your prior year's income and is shown on your CRA Notice of Assessment. You can contribute the lesser of 18% of your prior year income or the annual limit (which changes yearly). Contributing more triggers a 1% monthly penalty on the excess.
All investment income must be reported, including interest from savings accounts and GICs, eligible and non-eligible dividends, and capital gains on stocks and mutual funds. The CRA receives T5 and T5008 slips from financial institutions, so unreported income is typically caught during review or reassessment.
This CRA rule may apply to you if you paid for eligible childcare to enable you to work, study, or conduct business. Eligible expenses include daycare, summer camps, and babysitter costs. Only the lower-income spouse typically claims the deduction, up to the maximum amount allowed that year.