Canadians responsible tax filers: study

Canadians seem determined to file their taxes before the May 2 deadline, but are demanding more simplified tax system, according to a study from BMO Harris Private Banking.

The study revealed that 95% respondents aim to meet the tax filing deadline, and more than half (56%) will use their refunds either to pay bills and credit card balances or invest. Nine per cent will use their refunds for travel and leisure items, while another nine per cent has earmarked it for home renovations.

“This tax season, it’s all about doing the responsible thing,” said Sara Plant, vice-president and national director, wealth services BMO Harris Private Banking. “These results really speak to the character of Canadians and the importance they place on financial responsibility.”

According to the Canada Revenue Agency, the average tax refund exceeded $1,400 for the 2008 tax year. Men (24%) are more likely than women (17%) to use this money to invest in a Registered Retired Savings Plan.

Plant points out that having a financial plan in place that incorporates effective tax planning and management will help ensure investors are maximizing their financial returns and avoiding costly fines and unwanted surprises come tax time.

Some key findings:

• 84% are looking for a more simplified tax system
• More than three-quarters (76%) would like more tax incentives for home ownership/renovations
• More than half indicated that they would be using their tax refunds to pay bills/credit card balances or use the money to invest
• Over two-thirds (69%) are interested in more family-friendly tax incentives
• 62% would like to see a reduction in capital gains tax
• More than half (57%) would like to move to a flatter tax model
• Most Canadians (64%) agree that social benefits payments should be delivered through their tax return (this includes fitness credits and child care benefits)

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.