Quebecers think they’re leaving money on the table with their tax return

Among the reasons for this mistrust are a lack of financial knowledge and the fact that many taxpayers complete their tax returns themselves. (Photo: 123RF)

More than half of Quebecers feel that they leave money on the table when filing their income tax return, because they feel they are unable to complete it in the best possible way.

A poll by Polara, conducted from March 31 to April 7 on behalf of IG Wealth Management, shows that only 43% of Quebecers, and 40% of Canadians, are confident that they are taking full advantage of all the tax cuts they are entitled to. Access. They are also 34% (36% in Canada) who believe that they are not completing their tax return in the best possible way and that they are leaving the money to the tax authorities.

Literacy and self-production

Among the reasons for this distrust are a lack of financial knowledge and the fact that many taxpayers file their own tax returns, says Assistant Vice President, Taxes and Estate Planning at IG Private Wealth Management.

“We noticed in the survey that 27% of people say they don’t understand what a TFSA is,” he notes. For RRSPs, it’s 77%. There is a lack of financial knowledge and understanding, and this inevitably affects what can be done to reduce tax liability.”

Obviously, these shortcomings are detrimental to the people who decide to file their own returns requests.

Aurèle Courcelles explains: “People buy software and answer questions. But taxes are complicated. Do you really know what qualifies you in terms of medical expense deductions? It’s not easy for someone who isn’t their profession.

Err on the side of caution

Even by calling a professional, the customer may miss out on some discounts. Not because the accountant or tax professional lacks skills or knowledge, but rather because he does not have all the required information.

“If you don’t tell your accountant about certain things, how can he know, leave Aurèle Courcelles. If you decide not to give him certain papers because you think they are not deductible, he won’t be able to count them.

The taxpayer should, at the very least, have a good discussion with his accountant or tax professional about the events that have marked his personal and professional life over the past year, Aurèle Courcelles advances.

“It is better to err on the side of caution and bring in more papers than less,” he adds. There is no single rule and no specific case. And the rules often change along the way.”

Recovery

The survey also indicates that 66% of Quebecers expect an average tax refund of $2,250.

The Associate Vice President of Taxation and Estate Planning at IG Private Wealth Management sees a lack of tax planning here. He points out that this money is actually an interest-free loan to governments, and while it is in their pockets, it cannot benefit the taxpayer.

“The ideal is to stay as close to zero as possible,” he explains. Because that’s money, we can invest it and contribute to our RRSP and TFSA or even reduce our debt.

If your RRSP contributions are not made directly with your employer, it is possible to apply to governments for equivalent reductions at source.

Use recovery

The Polara survey also indicates the use of individuals for tax refunds.

In Quebec, 31% of people redirect the amount to their savings or investments, 16% use it for travel, 12% renew their possessions, and 5% use it to pay off part of their mortgage.

“The best use at the moment is probably going to be debt reduction,” says Aurèle Courcelles. “Interest rates are going up, and people need to assess how to maximize repayment.”


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