Common CRA Issues You Might Face While Filing Taxes in 2026
Even the most diligent taxpayers encounter problems with the Canada Revenue Agency. With the CRA ceasing to mail paper tax packages as of December 2025 and implementing new digital-only filing procedures, it’s likely there will be even more CRA issues faced by taxpayers.
Avoid triggering audits or delaying refunds. At GRFS Tax Planners, we help clients handle these challenges smoothly, ensuring accurate filings and minimizing CRA complications.
Today, we’ll be covering the six most common CRA issues taxpayers face in 2026, providing practical solutions and prevention strategies.
Key Takeaways
The CRA stopped mailing paper tax packages in December 2025, forcing more digital submissions
Tax rate changes and new GST rules on home purchases create reporting confusion
Proper planning and professional guidance prevent most common CRA issues
Documentation errors and missed deadlines trigger the majority of audits
Understanding these issues early helps you file correctly the first time
Issue #1: Mixing Up Business and Personal Taxes
When business and personal expenses get mixed up on tax returns, it creates red flags that often lead to audits.
Common scenarios include claiming home office deductions incorrectly, mixing personal vehicle expenses with legitimate business use, and categorizing family meals as business entertainment expenses. These mistakes happen frequently because the line between personal and business use isn't always clear, especially for entrepreneurs working from home.
We recommend all business owners work with a professional tax planner in order to ensure no accidental crossover between personal and business taxes. Prevention requires maintaining separate bank accounts and credit cards for business use, tracking business use percentages accurately with detailed logs, and saving all receipts with clear business purpose noted.
Issue #2: Personal Use of Corporate Funds
Personal use of corporate funds creates immediate shareholder benefit situations that the CRA monitors closely. When corporation owners use company money for personal expenses, it triggers complex tax implications including potential shareholder benefits, deemed dividends, and additional personal tax liability.
The CRA views undocumented withdrawals as taxable benefits, even if the business owner planned to repay the money later. Proper documentation requires written loan agreements for any shareholder advances, market-rate interest charges on personal loans from the corporation, and clear business justification for all corporate expenses.
Issue #3: Filed as a Dependent on Someone Else's Taxes
Adult children incorrectly claimed as dependents create complications for both the parent and child's tax returns. This becomes problematic when adult children have sufficient income to be independent or when they're eligible for their own tax credits and benefits. Being incorrectly claimed as a dependent affects GST/HST credit eligibility and other income-tested benefits.
Generally, children 18 and older with net income over a certain threshold cannot be claimed as dependents. There may be exceptions if the child is a full-time student with limited income.
Learn how to fix a wrongly-claimed dependent tax issue here: Help! I Was Claimed as a Dependent on Someone Else’s Taxes
Issue #4: Misreported Spousal RRSP Contributions
Electronic records showing the wrong contributor for spousal RRSP contributions create significant tax complications. The technical problem occurs when the annuitant gets listed instead of the actual contributor, causing tax deductions to post to the wrong person's account. This affects contribution room calculations and can result in over-contribution penalties.
Issue #5: Multiple RRSP Contribution Records
RRSP contribution reporting requires one record per contributor per plan, meaning multiple contributions throughout the year should appear as one total record. The exception applies when making contributions to different RRSP providers, which legitimately creates multiple records for the same taxpayer.
Issue #6: Inclusion of RRIF Contributions in RRSP Records
RRIF contributions incorrectly reported as RRSP contributions create phantom RRSP contributions on your CRA record. This mix-up affects contribution room calculations and can make it appear that you have more contribution room available than you actually do, potentially leading to over-contribution penalties.
This issue most commonly affects retirees managing both RRSPs and RRIFs, people converting RRSPs to RRIFs, and those receiving inherited retirement funds.
Taking Control of Your Tax Filing with GRFS
Our year-round tax strategy planning has helped various clients across Ontario keep their taxes organized and under control. Our expertise ensures that you're not making basic tax mistakes that could lead to all-out CRA audits.
In addition to our compliant tax filing expertise, we’re also experienced in applying smart, legal strategies to reduce your tax burden year-by-year.
Frequently Asked Questions
How long do I have to correct RRSP contribution reporting errors?
You should contact your financial institution within 30 days of discovering the error and file a CRA adjustment request within 60 days. The CRA typically processes RRSP corrections within 6-8 weeks of receiving proper documentation.
Can I still file a paper tax return if I have special circumstances?
Yes, the CRA accepts paper returns for specific situations including disability accommodations, complex international income, and technical difficulties with digital filing. Contact them to request paper forms for eligible circumstances.
What documentation do I need to separate business and personal expenses?
Maintain separate bank accounts, detailed expense logs with business purposes noted, receipts organized by category, and written policies about business use of shared assets like vehicles or home offices.
How do I know if my tax return triggered a CRA review?
The CRA sends a Notice of Assessment indicating if your return is under review. They may request additional documentation or schedule an audit. Professional tax representation can help manage this process and protect your interests.
Disclaimer: The information provided is based on current laws, regulations, and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.