First-Time Tax Filing in Canada: Common Mistakes and Refunds You're Probably Missing

Filing taxes for the first time in Canada is confusing - not because it’s technically hard, but because nobody tells you what you can actually claim. Most first-time filers submit a basic return and get back less than they’re owed, simply because they didn’t know what deductions and credits existed. This post covers the mistakes that cost people money, and the refunds that get left behind.

Mistake 1: Not Filing at All

The single most expensive mistake is not filing a return when you think you don’t owe taxes. Even if you had low or no income, filing your return unlocks:

• GST/HST credit - a quarterly payment from the CRA based on your income. You have to file to receive it, even if you made very little.
• Canada Carbon Rebate (Climate Action Incentive) - paid quarterly, based on province of residence. Again, you must file.
• RRSP contribution room - each year you file a return, you accumulate RRSP contribution room (18% of your earned income from the prior year). It doesn’t exist if you didn’t file.
• Benefits that depend on your Notice of Assessment - OSAP, some provincial student benefits, and other programs use your filed income to determine eligibility.

If you had any income at all - a summer job, freelance work, co-op pay - file a return.

Mistake 2: Missing the Tuition Tax Credit

If you paid tuition at a qualifying Canadian post-secondary institution, you have a federal tuition tax credit - 15% of eligible tuition fees federally, plus provincial credits that vary by province.

The tricky parts:

• You must have a T2202 slip from your school (usually available on your student portal by late February)
• You can carry forward unused tuition credits to future years
• You can transfer up to $5,000 of the current year’s credits to a parent, grandparent, spouse, or common-law partner - but only if you choose to, and you can’t transfer credits you’re carrying forward

Many students carry forward their credits for years and use them when they’re working full-time and in a higher tax bracket, which maximizes the value.

Mistake 3: Forgetting Interest on Student Loans

If you paid interest on a Canada Student Loan (or provincial student loan), you can claim that interest as a non-refundable tax credit. The credit is 15% federally of the interest you paid. It’s not huge, but it’s free money and most first-timers skip it.

You need documentation of interest paid - check your loan servicer’s portal or account statements.

Mistake 4: Not Claiming Moving Expenses

If you moved more than 40 km closer to a new job, school, or business in Canada, you may be able to claim moving expenses. These include:

• Transportation and storage
• Travel costs (vehicle, meals, temporary housing)
• Real estate commissions if you sold a home

Students often miss this because they think it only applies to full-time employees. It also applies to students who move to attend a post-secondary institution full-time - but only if the deduction is applied against scholarship, bursary, or research income.

Mistake 5: Not Reporting Income from Side Gigs or Platforms

If you drove for a rideshare company, delivered food, freelanced, sold things online, or did any other gig work, that income is taxable. First-time filers sometimes don’t realize this and either leave it off their return or don’t know how to report it.

Self-employment income goes on the T2125 form. You can deduct eligible expenses against that income - a portion of your phone bill if you use it for work, subscriptions, equipment. Keeping a basic record of income and expenses from any side work significantly reduces what you owe.

Not reporting this income is a risk: platforms like Uber, DoorDash, and Etsy are required to report payments above certain thresholds to the CRA, so the agency may already know about your income before you file.

Missed Refund: The Canada Training Credit

If you paid for eligible training in Canada and are between 26 and 65, you have access to the Canada Training Credit - a refundable credit of up to $250/year (accumulated in a “credit limit account” that starts at $250 in 2020 and grows by $250/year, to a maximum of $5,000 lifetime). This credit is refundable, meaning you get it even if your tax payable is zero.

Many people in their late 20s have been accumulating this credit without knowing it. Check your CRA My Account to see your Canada Training Credit limit.

Missed Refund: The GST/HST Credit for Low and Moderate Incomes

If your net income was below roughly $50,000 (the exact number depends on family status and province - check the CRA’s calculator), you likely qualify for quarterly GST/HST credit payments. These are automatic if you file a return, but you have to file. The payments range from modest to several hundred dollars per year depending on income and family status.

One Practical Note on Software

Most Canadians file using free tax software (Wealthsimple Tax, TurboTax Free, StudioTax). These tools walk you through the return and usually flag the most common credits. The CRA also has a list of NETFILE-certified software on their website. You don’t need an accountant for a basic return - the software is good.

Frequently Asked Questions

What’s the deadline to file taxes in Canada?

The filing deadline is April 30 of the year following the tax year. If you or your spouse/common-law partner has self-employment income, the deadline extends to June 15 - but any tax owed is still due April 30. Filing late when you owe money results in interest charges starting May 1.

What if I forgot to claim something last year?

You can request an adjustment to a prior year’s return using CRA My Account (T1-ADJ) or by mailing a letter to your tax centre. You can go back up to 10 years.

Do I need to report income from selling things online?

It depends on whether it’s considered a business. If you’re selling personal items occasionally for less than you paid - like cleaning out your wardrobe - generally no. If you’re buying items with the intention of reselling for profit, the CRA considers this business income and it must be reported. The distinction matters and the CRA does audit this.

Can I claim my home internet as a work-from-home expense?

If you worked from home due to your employer’s requirements (not by personal choice) and your employer provided a T2200 form, you may be able to deduct a portion of home office expenses including internet. Post-pandemic, many employers no longer issue T2200s, so confirm with HR before assuming you can claim this.

I had no income last year. Should I still file?

Yes. Filing with zero income establishes your record with the CRA, may qualify you for benefits like the GST/HST credit, and starts accumulating TFSA contribution room (which begins at 18 regardless of income). It costs you nothing to file and opens doors for future benefits.

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