It’s that time of year again. Business owners across Canada are well aware that with “tax season” upon them, getting all of their financial information prepared for filing is of top priority. Of course, doing your taxes is an annual requirement for both business owners and every day consumers alike. Apparently, not everyone really knows how to file their taxes.
Writing off the appropriate expenses and claiming the required income amounts are keys to proper tax filing. Incorrect calculations can mean the difference between securing a generous tax return or having to pay more taxes once the claim has been filed. Apparently, the latter is a problem that many Canadians are potentially facing.
According to a QMI Agency report published yesterday, nearly a quarter of Canadians are providing wrong answers on simple quizzes about personal taxes. This would indicate that many are not taking advantage of the deductions and credits that could be made available to them if they had better knowledge of how to make their claims.
A recent survey conducted by Leger Marketing for H&R Block found that most Canadians are unaware of how much money they could be saving each year. For example, a whopping 82 per cent of Canadians did not know how much a $1,000 RRSP contribution would save them in federal tax if they secured a taxable income of $50,000.
In addition, QMI reveals that “Six-out-of-ten were unaware that the lower-income spouse claims childcare expenses, while 40% of married Canadians didn’t realize they had to file their own claims with the spouse’s information included.” As well, only 27 per cent of Canadians are aware that they can claim their health care premiums made to a group plan at work as medical expenses.
Said Cleo Hamel, the senior tax analyst, H&R Block Canada: “No matter how you decide to prepare your tax return, you need an understanding of which credits and deductions you can claim and how to report them accurately. No one wants to pay the government more tax than absolutely necessary, so Canadians should make sure their return includes all their deductions and credits.”
It is also important to note that filing your taxes on time is of high importance. Waiting until the last minute and potentially missing the end-of-April deadline could also result in an inability to receive an appropriate return. File early and file correctly and do some research to make sure you are claiming expenses to maximize your tax return.