View source for Tax Accountant London Ontario: Common Filing Mistakes to Avoid 78480

<html><p> When you sit down to file a return, the numbers on the page look simple. Income goes here, deductions there, sign and submit. The trouble is rarely arithmetic. It is judgment. Which slips count as income, what counts as support documents, when to elect a method that reduces tax now without tripping penalties later. I have watched small gaps in understanding turn into reassessments, interest, and months of needless back-and-forth with the Canada Revenue Agency. The pattern repeats every spring in London and across Ontario. You do not need a complex structure to stumble into costly errors. You just need to miss two or three small details.</p> <p> This guide distills frequent mistakes I see in tax preparation in London Ontario, with practical ways to avoid them. It applies to individuals with straightforward T4s as well as to self-employed professionals, landlords, and owners of growing corporations. Where it helps, I share local context, such as common deductions for Western University staff or tradespeople in Middlesex County, and practices a seasoned tax accountant London Ontario practitioners lean on during peak season.</p> <h2> Slips and credits you thought the software would catch</h2> <p> Tax software is better than it was a decade ago, yet I continue to see clients miss slips or misreport lines that software cannot intuit.</p> <p> The first and most common blind spot involves investment income. Many London area residents hold accounts with a bank on Richmond or at Masonville Place. Late in February, they receive a T5 for interest, then a T3 from a managed mutual fund weeks later, then a T5008 for securities dispositions in March, sometimes even April. People file after the first wave and plan to adjust later, which is a recipe for a CRA unreported income letter. CRA receives its own copies of these slips, and matching happens automatically. If something is missing, you get a notice.</p> <p> Another frequent oversight involves the T2202 for tuition and education amounts. Students at Western or Fanshawe often expect these amounts to flow automatically. They do not. Someone must download them from the school portal and enter them. When parents claim a transfer from a child, paperwork is even more important. Without the signed transfer designation, CRA will question the claim.</p> <p> For employees, the T777S for employment expenses tied to home office claims during hybrid work remains tricky. Many assume the pandemic-era flat rate still applies or that any home office will do. CRA rules are narrower now. You need a T2200 or T2200S signed by your employer if you use the detailed method, and your workspace must meet the “principally used” test or be used only to earn employment income. Freelancers and independent contractors in London face similar constraints, though they use the business-use-of-home calculation under T2125 rules. The details matter, especially in semi-detached homes and basement offices where square footage is tight and multi-purpose rooms are common.</p> <p> Here is the discipline that helps: gather every slip before filing, including stragglers that arrive in March. CRA’s “Auto-fill my return” can fetch many items, but not all. Tuition forms and certain investment summaries from boutique brokers do not always feed through on time. A local tax service that handles tax preparation London Ontario wide will typically stage two intake checkpoints: one in late February for core slips and another in mid-March for late issuers. If you file early, do it deliberately, with a plan to wait or to cover known gaps using statements.</p> <h2> Claiming what you can justify, not what you hope to get</h2> <p> I see two kinds of risk with credits and deductions. One is timid — failing to claim what is allowed. The other is reckless — stretching a rule beyond recognition and hoping to slide under the radar.</p> <p> Medical expenses are a classic example of timid behavior. Many families have enough eligible costs to surpass the threshold if they combine receipts for a 12-month period ending in the tax year and pool costs for spouses and dependants. People leave thousands unclaimed because they assume prescriptions and dental cleanings are too routine to matter. They do matter. You need the right documentation, and you need to choose the 12-month window that yields the highest claim. A competent London ON accountant and their team will often run two or three windows to find the best result, especially for families with orthodontics or out-of-pocket physiotherapy after sports injuries.</p> <p> At the reckless end is vehicle expense abuse. Realtors, trades, and consultants in London who track mileage loosely often default to a rough percentage by memory. CRA expects contemporaneous logs or a defensible sampling method, along with separation of personal and business use. A quick anecdote from a Richmond Row hair stylist who started a side business selling beauty products: she claimed 90 percent business use for her SUV because she made deliveries across the city. Her debit card showed frequent grocery trips and weekend drives to Pinery. With no mileage log, CRA reassessed to 40 percent. The fix was simple, and it would have saved her hundreds — keep a mileage log, keep gas and maintenance receipts aligned to the log, and calculate business versus personal use each year.</p> <p> Home office claims present similar temptations. Multipurpose living rooms rarely qualify for business-use-of-home unless the business uses the space almost exclusively and regularly. If you are a contractor who stores equipment in the garage, partial claims for heat and electricity may be appropriate, but a blanket 30 percent for the entire house is not. Local context matters in London where many older homes have finished basements. CRA will ask whether the square footage used for work is segregated and whether the nature of the work requires that space.</p> <h2> Deadlines: underestimating how hard the clock hits</h2> <p> The CRA deadline calendar looks simple. Individuals file by April 30, and self-employed have until June 15 to file, though any tax owing is due April 30. Corporate filers face a different schedule: T2 returns are due six <a href="https://wiki-legion.win/index.php/Navigating_Income_Tax_London_Ontario:_Tips_to_Maximize_Refunds_39642">best tax service providers in London</a> months after year-end, and the tax is due two months after year-end for most Canadian-controlled private corporations without small business deduction limitations, three months in some cases. The pattern that hurts taxpayers is not missing by a day or two. It is planning around the wrong date entirely.</p> <p> A small landscaping company in Komoka set a corporate year-end of October 31 to match its season. The owner assumed the tax was due with the return six months later. It was due two months after year-end. The result was interest on late payments and later an ornerous instalment schedule. Any corporate tax accountant London businesses work with will set calendar reminders for the tax due date, not just the filing date, and build rolling accruals in the bookkeeping so cash flow covers instalments.</p> <p> For individuals, instalment interest penalties come up frequently when rental income or self-employment income spikes. The CRA’s instalment method leaves room to choose the prior-year or current-year estimates. If you had a one-time capital gain last year and you choose the prior-year method out of habit, you will overpay. If your business grew sharply this year and you stick to the prior-year method, you will underpay and be charged interest. Taking a few minutes each quarter to project year-to-date income and adjust instalments saves money and avoids notices. Accounting firms London Ontario residents trust will automate this review each March, June, September, and December.</p> <h2> Rental income: casual landlords, serious obligations</h2> <p> London’s rental market invites first-time landlords. A basement suite in Old North, a student house near Western, or a condo downtown can offset a mortgage. Rental income is not a casual hobby in the eyes of CRA. The mistakes are consistent.</p> <p> People confuse capital improvements with current repairs. Replacing a broken window is a repair, deductible in the year. Upgrading to new windows throughout the house is a capital improvement, which should be added to the cost base and depreciated through capital cost allowance. Claiming a big repair expense in year one can draw attention if invoices point to upgrades, and your depreciation schedule does not reflect it.</p> <p> Then comes allocation. A single-family home with a basement unit needs a reasonable split between personal and rental space for expenses. Some use square footage, others use number of rooms, but you should choose a method that reflects reality and stick with it year to year. Switching methods opportunistically can raise questions. If a house has 2,000 square feet and the basement apartment is 600 square feet, the math is cleaner when you identify shared spaces and utilities and apply a consistent ratio. For condos, many new landlords forget special assessments. Those generally increase the adjusted cost base rather than being deductible immediately.</p> <p> Finally, beware of short-term rentals. If you rent on a platform for part of the year, there may be HST implications if you cross thresholds or offer more hotel-like services. A local tax accountant near me who understands London’s bylaws and provincial rules can help you assess whether you moved from rental to business income without noticing.</p> <h2> Business income: choosing a structure and sticking to it</h2> <p> Side income becomes business income faster than people expect. Once you start invoicing for graphic design on evenings, or you run a food truck around Budweiser Gardens on event nights, you have decisions to make.</p> <p> The first decision is whether to register for HST. In general, you must register when your worldwide taxable supplies exceed 30,000 dollars in a single calendar quarter or over four consecutive calendar quarters. People often ignore the quarterly test and only look at a full year. Cross the threshold in June, and you should register by July. If you delay, you owe HST on sales from the date you should have registered. That can erase your margins on small contracts. A London ON accountant will set up milestone tracking in your bookkeeping so you see the threshold approaching before you cross it.</p> <p> The next decision concerns incorporation. There is no one-size answer. A corporate structure can allow income smoothing, tax deferral, and creditor protection. It also brings T2 filings, separate payroll remittances for the owner, and a need for clean bookkeeping. I have advised tech freelancers in London to remain sole proprietors until they consistently retain profits they do not need personally. If you take out all profits to pay bills, incorporation rarely helps early on. When profits exceed personal needs, a corporate tax accountant London businesses rely on can design a salary-dividend mix appropriate to your marginal bracket and RRSP room.</p> <p> Once you incorporate, the mistakes shift. Owner-managers mix personal and business spending. They pay for family groceries on the corporate card, then hope to sweep with a journal entry later. That habit creates a shareholder loan balance that, if not repaid within specific timelines, can be deemed a taxable benefit. A clean method helps: set up a regular owner payroll or dividends, transfer personal funds for personal expenses, and use the corporate card only for business. Good bookkeeping London Ontario services will enforce this discipline with real-time coding and monthly reconciliations.</p> <h2> RRSP, TFSA, and RESP mix-ups</h2> <p> Registered accounts are powerful tools, but they come with contribution limits and timing nuances. The standout mistake with RRSPs is overcontribution. People see the “RRSP deduction limit” on their Notice of Assessment and forget to subtract contributions made earlier in the calendar year for the prior tax season. The CRA tolerates a small overcontribution cushion, but beyond that, you face a 1 percent per month penalty on the excess. Save official contribution slips, and line them up to the tax year, not just the date you deposited funds.</p> <p> TFSAs feel simpler, and that is their danger. Withdrawals create new room the following January, not immediately. If you withdraw in June and recontribute in July, you might overcontribute, especially if you already maxed your room. For clients who hold multiple TFSA accounts across banks and credit unions around London, reconciling total contributions is essential. Keep a running tally or ask your accountant London Ontario team to track it in a simple workbook.</p> <p> RESPs create confusion with who claims the deduction. There is none. Contributions to an RESP are not deductible, though they attract grants. Yet I still encounter returns with phantom deductions inserted by mistake, often when people transpose RRSP and RESP acronyms in their software.</p> <h2> Moving expenses and relocation: good intentions, denied claims</h2> <p> London’s growth corridor draws families from Toronto and Waterloo, and it sends graduates to jobs elsewhere. The rules for moving expenses are narrow. You can claim reasonable moving costs only if your new home is at least 40 kilometers closer to your new work or school, and only against income earned at the new location. People claim house hunting trips and staging costs on the old home, which are not eligible. Others forget to prorate storage and temporary living costs to the minimum necessary period.</p> <p> If your employer pays a relocation allowance, keep every receipt. CRA will question lump-sum allowances unless you show what was spent on eligible items. An accountant can help you match employer T4 entries with your claim and avoid double counting.</p> <h2> Misunderstanding payroll: the quiet cash-flow risk</h2> <p> Payroll appears simple until you miss a remittance deadline. I have seen healthy small businesses in London rack up more interest on late source deductions than they ever paid in corporate income tax. The remittance schedule depends on your payroll size and history. New remitters often assume a monthly deadline. Some are required to remit by the 15th, others up to four times per month once they cross thresholds. Staff additions around spring construction season push a company into a different remittance bracket, and bookkeeping does not adjust. Payroll services London firms provide are not just about paystubs. They are about calendars, thresholds, and evidence. If you keep it in-house, build a bright, inescapable workflow around remittances and ROEs. If you outsource, choose a partner that tests remittance categories each quarter.</p> <p> Another recurring mistake involves T4s and T5s. Owners sometimes delay T4 issuance for family members on payroll or miss T5s for shareholder loans with interest benefits. Penalties for late slips accumulate per slip, per day, quickly turning a minor oversight into hundreds of dollars. A disciplined accountant London team will prepare draft slips in January, not February, and verify addresses and CPP/EI eligibility ahead of time.</p> <h2> Proof is king: record-keeping that withstands a review</h2> <p> CRA audits rarely come like lightning. More often you receive a review letter asking for support. If your records are tight, the process ends there. The worst outcomes stem from weak documentation, not from aggressive claims. Keep receipts rather than only bank statements. Bank statements prove payment, not the nature of an expense. If you claim tools as a tradesperson, keep invoices with item descriptions. If you claim meals for client meetings, note who attended and the business purpose.</p> <p> A practical rule that works for many London professionals: store receipts digitally the day you incur them. Many accounting firms near me provide capture apps that post directly to your ledger. It saves shoebox sorting in March and gives you a timestamped archive. If you are among those who do not enjoy technology, set a weekly ritual, such as Friday morning, to reconcile the week’s expenses.</p> <p> For rental properties, keep a digital folder per property with subfolders by year, then by expense category. When CRA asks for proof that a repair was not an improvement, you can show the before-and-after photos and the invoice. The burden of proof is on you.</p> <h2> When to seek help locally</h2> <p> You do not need a professional for every return. If you are a salaried employee with one T4 and no deductions beyond RRSPs, free software might be all you need. The signals that it is time to bring in a London ON accountant are clear:</p> <ul>  You have rental income, business income, or capital gains and want to optimize HST, CCA, and instalments without tripping reviews. You incorporated or plan to, and you need advice on salary versus dividends, payroll setup, and minute book upkeep. </ul> <p> For families with both employment and side income, a hybrid approach works. Handle the straightforward years yourself, and every two or three years book a checkup with a tax accountant London Ontario professionals respect. They will spot drift in your approach and reset the plan. If your situation changes — new rental, significant RSUs from a tech employer, a move into or out of province — schedule a consult early, not in April.</p> <p> Local advantages matter. A firm offering tax services London Ontario wide will understand typical union dues and professional fees for regional employers, the timing of T4A slips for healthcare workers, and common bursaries at Western. They will know the City’s property tax assessment process, how to apportion expenses for laneway homes, and which trades receipts tend to trigger CRA questions. Knowledge of the local business cycle helps too. Construction and landscaping revenues spike from May to October, which affects instalments and cash reserves. Retail businesses gear up for Western’s move-in season and the holidays. A planner who understands these rhythms can push or pull dividends or salaries to hit optimal brackets.</p> <h2> The corporate layer: places where owner-managers slip</h2> <p> Beyond basic compliance, owner-managed corporations face pitfalls that often hide in plain sight. Passive investment income within a corporation can grind down the small business deduction when it surpasses certain thresholds. An owner who sells an investment property held inside the corporation might have expected the lifetime capital gains exemption, which generally does not apply to real estate held in an operating company. Shareholder agreements and capital structure also matter when you plan to sell. These are not filing mistakes in the narrow sense, but they become filing problems when the structure forces bad tax results. A corporate tax accountant London entrepreneurs trust will ask hard questions about long-term plans long before the sale.</p> <p> Another subtle issue involves intercompany charges. If you own two companies and move cash between them casually, you invite shareholder loan and related-party transaction complexities. Loans need papered terms and reasonable interest. Management fees should reflect real services. If you cannot explain the economic purpose, CRA may recharacterize the transaction. An annual housekeeping session with your accountant can clean up these edges before year-end.</p> <p> And do not forget WSIB and employer health tax. Growing payroll can trip these obligations earlier than expected. They operate on their own calendars with their own penalties. Fold them into your compliance checklist once you pass thresholds.</p> <h2> Software is a tool, not a substitute for judgment</h2> <p> Tax software is great at arithmetic and form-filling. It is not great at telling you whether you should claim or defer capital cost allowance on a rental property this year, or whether to use the actual method or simplified method for vehicle expenses, or whether a bonus in February is smarter than a dividend in June. The best results come when software does what it does best, and a professional makes the judgment calls.</p> <p> A seasoned London ON accountant uses software to simulate pathways. For example, for a sole proprietor who is considering incorporation, we will model real cash outcomes at various income levels, factor RRSP room created by salary, assess CPP optimization, and compare against dividend-only strategies over a five-year span. On rentals, we will test CCA claims against potential sale timelines to avoid recapture pain. For families, we will compare spousal RRSPs with individual RRSPs, test TFSA rebuild strategies after withdrawals, and align RESP contributions to grant maximization.</p> <h2> A workable rhythm for the year</h2> <p> Tax is not a once-a-year scramble if you want consistent results. A workable rhythm makes it feel less like a sprint and more like a steady jog.</p> <ul>  In January, collect prior-year receipts and set up your digital folders. Ask employers for T2200/T2200S forms if you expect to claim home office or employment expenses. In March, pause before filing to check for late slips like T3s and T5008s. Review medical expenses for the best 12-month window. </ul> <p> The rest is quarterly cadence. Update mileage logs, review instalments in March, June, September, and December, and refresh HST thresholds if you are near the line. If you work with accounting firms London Ontario businesses rely on, push them for a calendar, not just a year-end package.</p> <h2> What a strong local accountant brings to the table</h2> <p> You can find generic guidance online. The value of a nearby professional lies in context and execution. A London accountant sees patterns: which expense categories draw queries, when CRA letters spike for certain claims, which slips from local institutions arrive late, and how to structure records so a reviewer spends minutes, not hours, on your case. They bring calm to filing season and foresight the rest of the year.</p> <p> If you are searching for “tax accountant near me,” focus on fit over flash. Ask about their process for late slips, their policy on instalment projections, how they handle document requests from CRA, and whether they offer integrated bookkeeping and payroll if you own a business. The best firms connect bookkeeping London Ontario services with year-end tax work so there is no hand-off gap. They keep you informed without burying you in jargon.</p> <h2> Final thought: fewer surprises, more control</h2> <p> Most tax mistakes are boring. They are not creative frauds or edge-case loopholes gone wrong. They are missing slips, late remittances, misapplied deductions, and inconsistent records. The fix is equally boring: a modest system, periodic reviews, and the humility to ask for help when a new situation shows up. Whether you keep it simple with a local tax service or partner deeply with a firm that covers taxes London Ontario, payroll, and corporate planning, aim for fewer surprises and more control.</p> <p> If you recognize yourself in any of these patterns — the forgotten T3, the vague vehicle log, the last-minute home office claim, the payroll remittance that went out on the 16th instead of the 15th — take this as a prompt. Tighten one process this month. Then another next quarter. Get a second set of eyes when your life or business changes. That steady discipline, more than any trick or tip, is what keeps your return clean and your mind clear.</p><p>DKAJ Tax & Financial - Tax Services London Ontario

553 Southdale Rd E Suite 102, London, ON N6E 3V9
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