Nearly all Canadians plan to file their taxes on time this year, according to a new survey, but more than a third are worried about leaving their money on the table.
According to an IG Wealth Management tax survey released Thursday, 96 percent of Canadians said they plan to file their 2021 tax return before the May 2 deadline, up 2 percent from last year. But while nearly all Canadians will file their taxes on time, many are concerned that they are not taking advantage of all the tax cuts available.
Of the 1,501 Canadians surveyed, 40 percent said they feel very confident they are benefiting from tax cuts, while 36 percent said they think they are not doing their taxes efficiently and leaving dollars on the table.
“The vast majority of Canadians are responsible and intend to raise their taxes before the deadline,” Damon Murchison, President and CEO of IG Wealth Management, said in a press release.
“However, the results also reveal that many may not prepare their tax returns in the most efficient manner and remain unclear about many tax-related matters.”
The deadline for filing 2021 taxes is May 2 this year, with the usual April 30 deadline being a Saturday.
The survey also found that 60 percent of respondents expect a refund this year, with an average of $2,400. When it comes to refunds, 29 percent say they plan to save or invest, and 28 percent say they will use them to pay off debt. Another 14 percent say they will use the cash flow to travel, while 9 percent will spend it on home renovations and 6 percent to pay off a mortgage.
“With interest rates still at what they are, paying down debt is not a bad idea,” Oriel Corsells, assistant vice president for tax and estate planning at IG Wealth Management, said in an interview.
“I hope that the fact that 28 percent of people use[refunds]to pay off family debts and bills is an indication that people are thinking wisely about where that money should go.”
However, many Canadians are wary of entering tax season. A H&R Block poll released last month found that changes to hiring have fueled a sense of confusion ahead of this year’s tax deadline, with 40 percent of those surveyed saying they had “no idea” whether they would owe money or get a refund. Changes to COVID-19 benefits have also raised concerns, with half (49 percent) of those who have received government benefits due to the pandemic reporting they are unclear about the tax implications of doing so. Another 41 percent say they worry they might owe money on those benefits.
Courcelles says the most important piece of advice he gives filers is to remember that tax filing is not tax planning.
“A tax file that deals in the past and there is nothing you can do about that today,” he said.
“It’s time (to ask yourself) what tax planning strategies you can implement to try to reduce taxes when doing this exercise next year…tax planning is an important component of financial planning.”
The IG Wealth Management survey was conducted between March 31 and April 7, and has an estimated margin of error of +/- 2.5%, 19 times out of 20. Results are weighted by gender, age, and region, using the latest census data. , to be representative of the Canadian population as a whole.
Elijah Sikerska is a senior correspondent for Yahoo Finance Canada. Follow her on Twitter Tweet embed.
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