A full 25% of Canadians have already filed their taxes, according to a new survey for BMO Nesbitt Burns. Not only are we Canadians keeners, we’re pretty confident about our tax filing abilities too. The overwhelming majority of respondents to the BMO poll are confident that their 2013 tax returns will take advantage of all the tax deductions, tax credits and other tax savings available to them.
Not in either of these camps? Relax. The tax filing deadline is still one month away (April 30) and MoneySense has got you covered. All Access subscribers can check out Evelyn Jacks’ latest column “Must-knows to file this year’s taxes” listing deductions for singles, families and business owners alike and everyone is free to peruse our 2014 Tax Essentials guide.
Our guide will not only help score the fattest refund possible but also help you decide how to use it. Of those expecting a refund for the 2013 tax year, 37% plan to use the money to pay household bills and/or reduce their overall debt load, BMO found. Twenty-eight per cent will save or invest, 13% will fund vacations or purchase leisure items, 11% will do home renovations, less than 10% will pay down their mortgages and 3% will donate to charitable causes.
“Canadians’ financial priorities and situations differ depending on their unique needs and goals, but it’s great to see that the majority of those who are expecting a tax refund will use the money to cover basic expenses, reduce their overall debt and/or save and invest for the future,” BMO’s John Waters said in a press release.
While the overwhelming majority said they felt the most aware of how their income is taxed generally (77%) and the tax implications of contributing to a Registered Retirement Savings Plan (75%), only 41% said they are familiar with how capital gains and dividend income are treated from a tax perspective.
“Understanding how investments are taxed is an important part of good financial planning. If you want to derive the maximum return from your investment portfolio, then it’s critical that you be tax smart and understand the potential tax implications that could arise when you make an investing decision,” Waters said.
For detailed information on how investments are taxed and where to hold them for the greatest tax efficiency, read Preet Banerjee’s “Asset location: Everything in its place.”
The BMO survey was conducted by Pollara between March 14th and March 17th, 2014 with an online sample of 1,007 Canadians. The margin of error for a probability sample of this size is ± 3.1%, 19 times out of 20.