Filing your income tax return can be stressful. You could owe additional money, be subject to CRA tax penalties, or have to wait months for a refund that should have arrived in weeks if you make even the slightest mistake: a missing form, an incorrect number, or a skipped step.
Whether you file it yourself or use a preparer, these are the common tax errors that trigger tax refund delays, reassessments, and lost deductions most often in 2026.
The good news: every mistake below is avoidable once you know exactly what triggers it.
Jump to a section: Filing late · Missing income · Wrong personal info · Missed deductions · Mixed expenses · Payment deadline · Marital status · T1135 · Math errors · TFSA/RRSP
Quick-Reference: The 10 Mistakes at a Glance
| # | Mistake | Who It Hits | What It Actually Costs |
| 1 | Filing late | Everyone | Up to 50% of balance owing (repeat offenders) + 7% daily interest |
| 2 | Missing income | Everyone | Reassessment with interest backdated to April 30 |
| 3 | Wrong SIN or info | Everyone | 4–12 week refund delay |
| 4 | Missed deductions | Everyone | Real money left unclaimed — a missed $10,000 RRSP deduction alone can mean $2,000–$3,000 in lost tax savings |
| 5 | Mixed business/personal expenses | Self-employed | Denied claims + CRA can reopen 3 years of returns |
| 6 | Missed self-employed payment date | Self-employed | 7% interest, compounding daily, from May 1 until paid |
| 7 | Not updating marital status | Everyone | Repayment of overpaid CCB/GST credits, sometimes with interest |
| 8 | Skipping Form T1135 | Everyone with foreign property | $25/day, minimum $100, up to $2,500 — even with zero tax owing |
| 9 | Math/data entry errors | Everyone | 4–12 week manual review |
| 10 | TFSA/RRSP overcontribution | Everyone | 1% per month on the excess, every month it stays over the limit |
1. Filing Your Return Late
This is the mistake that costs the most, and it’s entirely avoidable.
The cost
When you owe taxes and miss the filing deadline, the CRA charges 5% of your balance immediately, plus 1% for every full month you’re late, up to 12 months. If you were penalized for late filing in any of the past three years and the CRA sent you a formal demand to file, the penalty bounces to 10%, plus 2% a month for up to 20 months, up to 50% of your balance owing.
On top of any penalty, the CRA charges daily compounding interest on unpaid tax. For 2026, that prescribed rate is 7% annually.
Who this affects
Anyone who files after the deadline and owes money. Although there isn’t a late filing penalty if you are entitled to a refund, you will have to wait longer for your money and run the risk of postponing benefit payments associated with your return.
How to fix it
File by April 30, even if you can’t pay yet. There’s no penalty for owing money — only for filing late. Set up a payment arrangement with the CRA afterward instead of avoiding the return altogether.
2. Not Reporting All Your Income
The CRA already has more information about your income than most people assume.
The cost
Employers, banks, and many gig platforms (like Uber and DoorDash) send the CRA copies of your T4S, T5S, and T4As. The CRA’s matching system compares this against what you report, and a gap usually triggers an automatic reassessment — with interest calculated back to the original April 30 due date, not the date they caught it.
Unlike in the U.S., the CRA doesn’t automatically get reports from most everyday e-transfer or payment apps, including PayPal and Interac. That doesn’t mean this income flies completely under the radar, though — it just means the CRA leans on other methods to catch discrepancies, like monitoring registered platforms, conducting audits, and comparing what people spend against what they report earning.
Who this affects
Anyone with gig work, freelance income, tips, investment income, or crypto trading on top of a regular job.
How to fix it
Before you file, log into CRA My Account and use the Auto-fill My Return feature to pull in every slip on file, then compare it against your own records. Report any gig or freelance income without a slip on Line 13500 or 13700 depending on your situation.
3. Wrong SIN, Address, or Banking Details
This sounds minor, but it’s one of the most common reasons refunds stall.
The cost
Your refund may be delayed by four to twelve weeks while the CRA manually confirms your identity or reissues payment if your Social Insurance Number, address, or direct deposit information is incorrect.
Who this affects
Anyone who’s moved, changed banks, or is filing for a household member for the first time.
How to fix it
Before you file, take a few minutes to update your address and direct deposit info in CRA My Account. Also, double-check every digit of your SIN against your actual card — even one transposed number can trigger a hold on your return.
4. Missing Deductions and Credits
This one doesn’t cost you a penalty. It costs you money the government already agreed you’re entitled to.
The cost
Deductions have real rules attached, and vague advice like “claim your medical expenses” leads people to claim amounts that get reduced to zero. Here’s what actually applies:
- Medical expenses: Only the portion above the lesser of 3% of your net income or approximately $2,890 (2026) is deductible. If your net income is $60,000, your threshold is $1,800 — expenses below that don’t count at all.
- Home office (employees): The COVID-era flat-rate method the $2/day deal, capped at $500 — is gone now. If you’re an employee claiming home office expenses, you’re stuck with the detailed method, which means getting a signed Form T2200 from your employer and actually keeping records of your real expenses.
- Home office (self-employed): Different, broader rules apply through the business-use-of-home calculation on Form T2125 see the self-employed vs. corporate breakdown for how this is calculated.
- Moving expenses: Only apply if you moved at least 40 kilometers closer to a new work or school location. A cross-town move that doesn’t clear that distance doesn’t qualify, no matter the cost.
Who this affects
A lot of people claim deductions without actually checking whether they meet the specific threshold or test required, and this is especially common among those claiming this particular deduction.
How to fix it
Keep your mileage logs and receipts together in one folder throughout the year. And before you submit any claims, don’t just assume a deduction applies — confirm the specific rule that goes with it, whether that’s a distance test, an income threshold, or a required form.
5. Mixing Personal and Business Expenses
If you’re self-employed or run a side business, this is one of the fastest ways to draw a closer look from the CRA.
The cost
The CRA’s test is simple: was the expense incurred to earn business income? If a personal and business charge sit on the same statement with no clear split, the CRA can deny the claim — and if the pattern repeats, reopen three years of returns at once instead of adjusting a single line.
Who this affects
Freelancers, contractors, and small business owners claiming shared expenses like a cell phone, home internet, or a vehicle used for both work and personal driving.
How to fix it
Even if you are a sole proprietor, open a different business card and bank account. Instead of estimating a round number for shared expenses like a phone or car, keep track of the actual business-use percentage—a logbook for car use, an honest split for a phone plan.
6. Missing the Self-Employed Payment Deadline
This mix-up trips up a lot of freelancers every year.
The cost
Self-employed filers get until June 15 to file their return, but any balance owing is still due April 30. Miss that date and interest — currently 7%, compounding daily — starts accruing from May 1, even though your filing deadline hasn’t technically passed yet.
Who this affects
Sole proprietors, freelancers, and contractors filing a T2125. Note that your spouse or common-law partner also gets the June 15 filing extension if you’re the self-employed one in the household — but any balance they owe is still due April 30 too.
How to fix it
Pay a reasonable estimate by April 30 based on your prior year’s tax bill, then true it up when you actually file in June. For a full breakdown of self-employed vs. incorporated filing deadlines, see this personal vs. business tax deadline comparison.
7. Forgetting to Update Your Marital Status
Got married, divorced, or separated this year? The CRA needs to know and not just at tax time.
The cost
Your marital status affects income-tested benefits like the Canada Child Benefit and the GST/HST credit. An outdated status can mean you were overpaid and now owe it back, sometimes with interest, or that you were underpaid and missed money you were entitled to.
Who this affects
Anyone whose status as a couple changed during the tax year, including those who became common-law after living together for a year.
How to fix it
Update your status with the CRA through My Account or by phone as soon as it changes, not when you file the following spring.
8. Ignoring Form T1135 (Foreign Property)
This one surprises a lot of people, including experienced filers.
The cost
If you own foreign investments, property, or bank accounts worth more than $100,000 CAD combined at any point in the year, you generally need to file Form T1135. This includes U.S. brokerage accounts held outside a Canadian bank and some foreign rental property.
Miss it, and the penalty is $25 a day (minimum $100) up to $2,500 — even if every dollar of income was correctly reported elsewhere on your return. If the CRA decides the omission was deliberate or grossly negligent, penalties can climb to $12,000 or more.
Who this affects
Anyone holding foreign property above the $100,000 threshold — a lower bar than most people expect, especially with U.S. stocks or a foreign rental property.
How to fix it
If your foreign property’s total cost stayed under $250,000 throughout the year, you likely qualify for simplified reporting — but you still have to file. Ask your tax software or preparer directly: “Do I need to file a T1135 this year?”
9. Math and Data Entry Errors
Simple typos still cause real delays, even with software doing most of the calculating.
The cost
A misplaced decimal, a swapped digit, or a mismatched total can flag your return for manual review, adding 4 to 12 weeks before it’s processed.
Who this affects
Anyone entering numbers by hand instead of using Auto-fill My Return, and anyone rushing through a return close to the deadline.
How to fix it
Use certified tax software and its Auto-fill feature to pull slip data directly from the CRA. Even then, glance over the final totals before you submit — software prevents math errors, not entry errors.
10. TFSA and RRSP Overcontributions
This is one of the most common — and most misunderstood — CRA penalty letters people receive.
The cost
TFSAs have zero overcontribution buffer. Go even $1 over your available room and the CRA charges 1% per month on the highest excess amount that month, continuing until you withdraw it or new room opens up the following January 1.
RRSPs are more forgiving with a $2,000 lifetime buffer, but anything beyond that triggers the same 1%-per-month penalty.
Who this affects
Anyone with multiple accounts across different financial institutions who loses track of total contribution room, or anyone who withdraws from a TFSA and re-contributes the same amount in the same calendar year — one of the most common versions of this mistake, since withdrawn room doesn’t reopen until January 1.
How to fix it
Check your available TFSA and RRSP contribution room in CRA My Account before contributing. Keep track of contributions made across all financial institutions, and if you accidentally overcontribute, withdraw the excess as soon as possible to minimize penalties.
Already Made a Mistake? Here’s What to Do
Mistakes happen even to careful filers. If you catch something after filing, you have real options.
For minor errors, you can file an adjustment directly through CRA My Account. For more serious issues, like unreported income from past years, the Voluntary Disclosures Program (VDP) lets you come forward before the CRA finds it themselves. The VDP can provide relief from penalties, though arrears interest typically still applies — it’s not a way to erase the debt, just to avoid the harshest consequences of hiding it.
The worst move is doing nothing and hoping it goes unnoticed.
The Bottom Line
Three mistakes on this list cause the most financial damage: filing late, leaving out income, and skipping Form T1135. Get those three right, and you’ve avoided the majority of the cost on this page.
For everything else deductions, personal-vs-business splits, contribution room— the fix is usually the same: check the specific rule before you claim it, rather than assuming it works the way you’d expect.
It’s worth the ten minutes before filing to take a closer look at how personal and business taxes are actually divided under CRA rules if your situation involves self-employment income, mixed business and personal expenses, or a question about whether to incorporate. A consultation with a CPA prior to April 30 is far less expensive than a reevaluation after the fact for anything more complicated than a standard return.
Frequently Asked Questions
What happens if I file my taxes late in 2026?
If you owe a balance, you’re charged 5% of it immediately plus 1% per month late, up to 12 months — or 10% plus 2% a month for repeat offenders. Daily compounding interest at 7% applies on top of any penalty.
How long does the CRA take to process a tax return?
Most electronically filed returns process within about two weeks. Paper returns, or returns flagged for manual review due to errors or missing info, can take 8 to 12 weeks or longer.
Can I fix a mistake after filing my tax return?
Yes. Minor errors can be corrected through a change request in CRA My Account. More serious omissions may qualify for the Voluntary Disclosures Program.
Do I need to file a T1135 if I already reported the income?
Yes. The T1135 penalty applies for failing to file the form itself, even if every dollar of income from the foreign property was correctly reported elsewhere on your return.
