How Not to Do Your Taxes in Canada

how to do your taxes canada

A Canadian tells us about her taxes:

1. $2,690: Tax reassessment from 2011, to cover the pension plan payments neither you nor your employer made. (Sent: Jan 21st; Received: Feb 4th or so; Due: Feb 11th) Side note: About half of this amount is due to the fact that, because you are apparently self-employed, you pay both your own pension plan deduction, as well as a matched contribution that would normally be made by your employer (e.g. approx $1,300).

2. $95.83: Oh yeah, plus another $100 in interest accrued for not paying the above on time. So really, a $2,790 payment in total.

3. $184: The cost of getting your taxes done by a professional to make sure this doesn’t happen again. Note that it costs more because your situation qualifies as “complex.”

4. $6,000: The

amount deposited into a newly opened retirement savings plan (RRSP) in order to accrue a sufficient tax rebate (Due: March 1st). This amount is calculated to offset $1200: The amount estimated by the tax professionals that you owe the government for 2012.

5. $200 (approx): The final amount owed for 2012. (A $7,000 RRSP deposit could have probably brought this down to 0.)

6. $1,605.05: Last but not least, the first quarterly tax instalment for 2013. (Due: March 17th).

Total: $10,774.88 Granted, $8,690 of that will be yours again in retirement, so it’s probably shitty to complain.

Recalculated total: $2,084.88. And yet, that just doesn’t seem to accurately reflect.

This Canadian makes $36,000 a year and has been paying $1,605.05 quarterly in taxes from the beginning (of the job, not the beginning of time).

Source: thebillfold.com

Category: Taxes

Similar articles: