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If you’ve claimed incorrect business deductions, fix the return as soon as you find the mistake. You can change a filed return online through “Change my return” in your CRA account, and the CRA says online changes take about two weeks. Correcting it yourself before the CRA writes to you usually gets a better result than waiting for a review.
How do you correct a return you’ve already filed?
There are two routes. The quick one is “Change my return” in your CRA account, or the ReFILE feature in certified tax software. The CRA lists two weeks for those. The slow one is Form T1-ADJ by mail, and the CRA gives 19 weeks for that.
Both routes cover amounts you already reported, and a self-employed return is no exception. Elections and personal details aren’t part of it.
Once it’s processed, a notice of reassessment shows what changed. If part of the request is refused, a letter says why. Keep whatever you sent. The CRA may ask for it.
A refund can’t be issued for a change requested more than 10 calendar years after the tax year ended. That limit is about refunds. It doesn’t stop the CRA from reviewing what you owe.
What do incorrect business deductions cost?
More than the tax on the expense, once the extras show up. Take a sole proprietor in Ontario who reports $80,000 of net business income, then finds $4,000 of personal costs mixed into the expenses. Corrected, the net income becomes $84,000.
In our engine that adds $1,091.12 of federal and Ontario income tax, and because the extra income falls in the second CPP tier it also adds $320 of self-employed CPP, which brings the total to $1,411.12 before any interest. Ouch.
The self-employed tax calculator lets you run your own version. One caveat: that tool lowers income tax when you type in deductions but doesn’t lower CPP, so enter your net income directly for a fair comparison.
Will you be charged a penalty or interest?
Expect interest on the extra tax. We couldn’t confirm the current rate or how it accrues, so check the CRA’s interest page before you estimate.
A penalty is a different matter. For a knowingly false statement or one made under gross negligence, the CRA’s page on false reporting shows a penalty of the greater of $100 or 50% of the understated tax. On our example, 50% of $1,091.12 is $545.56. An honest mistake that you then fix doesn’t automatically fall into that group, and the CRA has to prove the case on a balance of probabilities.
Slip or argument? It comes down to what you can show. A receipt for a personal item that ended up in the wrong column is a slip. A pattern of them is harder to explain.
When should you use the Voluntary Disclosures Program?
When the mistake is bigger, older or wider than one line on one return. From 1 October 2025, the CRA describes two tiers. If you come forward before it contacts you, it offers 100% penalty relief and 75% interest relief. If it contacted you first, relief is up to 100% of penalties and 25% of interest. Both cover information going back up to 10 years, and you still pay all the tax.
Not everyone qualifies. Anyone under audit or investigation is out, and so is anyone whose non-compliance was egregious or intentional. You can ask for an informal call first, with no commitment to go on.
For a small error on a single recent return, a plain change request is usually the better tool. VDP is for the ones you’d lose sleep over.
What should you check before you file the fix?
Start by going through every expense line against your receipts, including the ones you think are fine. Errors tend to travel in groups.
Then work out what the corrected tax looks like. The income tax calculator gives a federal and provincial estimate, and the marginal tax rate calculator shows what each extra dollar of income costs you. If you also owe instalments, the tax instalments calculator shows what your quarterly payments could look like.
If you claimed GST or HST input tax credits on the same expense, the sales tax return needs fixing too. The CRA has a separate VDP route for GST and HST, and we haven’t read its terms in detail.
Where do these numbers come from?
The change methods and the 10 year refund limit come from the CRA’s page on changing a return. The penalty comes from its page on false reporting, and the VDP relief levels from its 2026 tax tip on the program. We checked them on 30 September 2026. Our example numbers come from our own income tax engine using 2026 rates, so the amounts for an earlier year would differ. This site has no connection with the CRA.
Frequently asked questions
How do I change a return with wrong business expenses?
Use Change my return in your CRA account, ReFILE in tax software, or Form T1-ADJ by mail. The CRA lists about two weeks online and 19 weeks by mail.
Will the CRA penalize me for a mistake I fix myself?
Not automatically. The 50% penalty applies to knowingly false statements or gross negligence, and the CRA has to show that. Interest on the extra tax still runs.
How far back can I fix a return?
The CRA won't issue a refund for a change requested more than 10 calendar years after the tax year. The VDP covers information going back up to 10 years.
What is the Voluntary Disclosures Program?
A CRA program for correcting old mistakes. Since 1 October 2025 an unprompted application can earn 100% penalty relief and 75% interest relief.
Do I still pay the tax I missed?
Yes. Neither a change request nor the VDP cancels the tax owing, only penalties and part of the interest.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.