While most Canadians feel they understand income tax issues, the reality is that the majority are not familiar with certain key deadlines – and this can lead to a hit to their wallets, according to the results of a BMO survey released December 13.
While 88% of those surveyed said they thought they were familiar with income tax deadlines, considerably fewer were able to correctly identify key dates.
"Important tax deadlines occur at or before the end of the year that Canadians should be considering," said John Waters, vice-president, head of tax and estate planning for BMO Nesbitt Burns.
"The end of December marks an important time for many who are looking to minimize the amount of taxes they pay on their income this year."
The survey found that Canadians were unable to identify the tax deadline dates for:
- payment of quarterly tax installments, December 15: 82% did not know the deadline for this, up from 73% in 2012;
- tax-loss selling, December 24: 90% unaware (85% in 2012);
- charitable donations and other tax credits/deductions, December 31: 68% did not know (61% in 2012);
- tax-free savings account withdrawals, December 31: 83% unaware (78% in 2012); and
- RRSP contributions for those turning 71, December 31: 75% did not know (70% in 2012).
British Columbians were tied with those in the Atlantic provinces for having the lowest percentage of respondents who start thinking about tax return issues at the start of a new year. The survey found that 43% of respondents in B.C. thought about these issues early, compared with a national average of 50%.
Waters said that Canadians should start thinking of tax planning as a year-round activity.
