Did you read this Globe & Mail article about Canadians filing their own taxes?
I did, and it bugged me.
Actually, only the middle of the article bugged me. The beginning was full of interesting statistics and the end made a great point about how tax planning should become a more important part of regular Canadians’ day-to-day lives. But the middle… well, the middle was full of the kind of fear mongering that we’re trying to fight.
…more work needs to be done to help taxpayers take full advantage of the savings available, the survey indicates.
More than half of Canadians (58 per cent) said they aren’t certain about the tax treatment of capital gains and close to two-thirds (62 per cent) admitted lack of knowledge about how dividend income is taxed.
On the charitable front, one-third (33 per cent) lack knowledge of exactly how giving is taxed, says the report.
Meanwhile, 25 per cent said they have trouble grasping the tax implications of Registered Retirement Savings Plans (RRSPs) and 36 per cent are spotty on the tax treatment of a Tax-Free Savings Account (TSFA).
The article goes on to imply that because most Canadians don’t understand how certain types of income and deductions are taxed, they are paying too much tax.
This is decidedly untrue. Just because you don’t understand the nitty-gritty of the dividend gross-up and credit mechanism doesn’t mean you’ll pay too much tax if you prepare your own return. Software, like SimpleTax, automatically calculates this for you. Even the paper forms teach you how to correctly report this income and credit.
The same goes for capital gains, donations, political contributions, medical expenses, RRSPs… you get my point.
Preparing your own return allows you to see and understand how things like RRSP contributions impact your tax bill. With SimpleTax, because everything is calculated in real-time, you can see this impact every time you enter an amount. No tricky calculations and no “boning up on the Income Tax Act” required. We also give you a simple list of every credit and deduction you can claim, supply help in plain English, and provide access to the paper forms themselves—so you can see the calculations in action.
We’re sad to see how the tax preparation industry has convinced people that they need to pay hundreds of dollars to have someone else take care of their taxes for them. Yes, there are people out there with complicated tax situations—where an accountant provides incredible value. But, chances are, your tax situation is simpler than you think.
Yes, you can do your own taxes. Don’t let anyone scare you into thinking you can’t.