Maria, I haven't finished it yet.....correct I didn't finish it yet............correct If you are stressing the incompleteness of the action now, or its importance now, then use the present perfect. Present Perfect (‘yet’ meaning up to and including now) I am working on the repair now. I haven't finished it yet. ....I am working on it right now. I am not working on it now. I haven't finished it yet. ....I am not working on it but the finish of the repair is still important to the present moment in my thinking. (I am planning to, hoping to finish it.) If you are stressing the non-completion of the action in the past (up to but not including now) or the non-relevance of the finish to the present moment, use the past simple. Past Simple (‘yet’ meaning up to but not including now) ......I am not working on the repair. I didn't finish it yet. I worked on it at some time in the past. I did not finish it at some time in the past. I am working on the repair now. I didn't finish it yet...up to not including the present moment. ......I am working on it but the finish is not relevant to the present moment in my thinking. (When it’s finished, I’ll let you know!)

Your teacher is wrong. Very badly wrong. Change your teacher.

"I haven't finished it yet" it is correct. (http://www.britishcouncil.org/learnenglish-central-grammar-adverb-already-yet-still.htm)

It is correct

right