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I need the joy of learning how CAD income tax works!

I need the joy of learning how CAD income tax works!

Old Dec 15th 2010, 3:42 pm
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Default Re: I need the joy of learning how CAD income tax works!

Originally Posted by iaink
It will never happen, the north american mindset is to be very upfront and paranoid about taxation, and want to double and triple check that they are not being fleaced. Hence annual tax return paperwork and no tax included on shop sticker prices so that you are seing it crystal clear on the sales slip how much the government just lifted from your wallet.
The system is designed for most people to be able to claim stuff back and get their money back as this encourages compliance. But I have to say I quite like it too - tax returns are simple for the most part and it's nice to see how much of my own money I get back.
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Old Dec 15th 2010, 3:44 pm
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Default Re: I need the joy of learning how CAD income tax works!

Originally Posted by theotherlebowski
thanks guys

it seems like a staggeringly inefficient and cumbersome system to me but then i'm not an accountant! seems like it's one thing systemically that the UK kind of got right...
What's staggeringly inefficient and cumbersome about it is that everyone has to file for the calendar year, meaning that RevCan has to have huge computers and armies of temporary staff early in the next year and accountants are rushed off their feet in April. If they switched to making your tax year run from, say, your birthday, a great frenzy could be avoided.
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Old Dec 15th 2010, 3:50 pm
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Default Re: I need the joy of learning how CAD income tax works!

Originally Posted by dbd33
What's staggeringly inefficient and cumbersome about it is that everyone has to file for the calendar year, meaning that RevCan has to have huge computers and armies of temporary staff early in the next year and accountants are rushed off their feet in April. If they switched to making your tax year run from, say, your birthday, a great frenzy could be avoided.
I dunno about that, there is nothing stopping your average Joe from filing anytime between the New Year and the end of April is there? Receipt of T4s accepted
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Old Dec 15th 2010, 3:52 pm
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Default Re: I need the joy of learning how CAD income tax works!

Originally Posted by Almost Canadian
I dunno about that, there is nothing stopping your average Joe from filing anytime between the New Year and the end of April is there? Receipt of T4s accepted
We don't though, do we? We, the great unwashed, all file at the last minute.
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Old Dec 15th 2010, 4:01 pm
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Default Re: I need the joy of learning how CAD income tax works!

Originally Posted by iaink
Dont many people have to file returns in the UK now?
I did three in over 30 years. One when I started work. One when I took in a mate as a lodger and the last one when he moved out.

Now I've done six since 2004.

Originally Posted by iaink
It is what it is, no point railing against it.
True enough. I do think there's a bit of obsession with tax though.

People speak about their tax dollars (Brits never spoke of tax pounds did they?) and there's tax season.

And of course, tax freedom day or whatever it's called.

Last edited by BristolUK; Dec 15th 2010 at 5:03 pm.
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Old Dec 15th 2010, 4:19 pm
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Default Re: I need the joy of learning how CAD income tax works!

I don't think the two systems are all that different.

It is true that the P45s and cumulative tax codes in the UK mean that employer deductions are more accurate and are more likely to approximate the tax you actually owe if you have more than one job in a tax year.

It is also true that there are more deductions/credits available to the average joe in Canada. Means tested benefits in Canada are calculated on your income as reported on your tax returns so there is a great incentive to file each year.

However, the principle is the same. In both countries you have to file a tax return if you owe tax, or if the revenue request you to. You file a return if you want a refund because of allowances not included in you tax code. In both countries you don't have to file a tax return if you don't owe any tax.
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Old Dec 15th 2010, 4:21 pm
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Default Re: I need the joy of learning how CAD income tax works!

I quite enjoy tax time myself - pay some bloke at a tax company $100 bucks , hand over a few receipts and the T4's and wait on a tidy deposit coming in to the bankie in 10 or 11 days or pay an extra few bucks and get a cheque there and then - Nothing inefficient or cumbersome about it and I do it the lazy way rather than spending the half hour doing it myself.
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Old Dec 15th 2010, 5:01 pm
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Default Re: I need the joy of learning how CAD income tax works!

Originally Posted by nldfc
I quite enjoy tax time myself - pay some bloke at a tax company $100 bucks , hand over a few receipts and the T4's and wait on a tidy deposit coming in to the bankie in 10 or 11 days or pay an extra few bucks and get a cheque there and then - Nothing inefficient or cumbersome about it and I do it the lazy way rather than spending the half hour doing it myself.
half an hour?? takes me forever and usually much grief to sort it all out and then hand it in to the geezer that does it. Every year I have plans to be more organised but...
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Old Dec 15th 2010, 5:09 pm
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Default Re: I need the joy of learning how CAD income tax works!

Originally Posted by JonboyE
... you don't have to file a tax return if you don't owe any tax.
We're some way short of tax levels but we do our returns every year.

I quite enjoy it in a weird sort of way.

Do you think you're more likely to be audited (or whatever) if you don't file than if you do? Especially if returns suddenly stop?

Do you think we look perverted to the agency because we file each year?

Presumably there are no GST refunds if you don't file?

Last edited by BristolUK; Dec 15th 2010 at 5:11 pm.
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Old Dec 15th 2010, 5:20 pm
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Default Re: I need the joy of learning how CAD income tax works!

Originally Posted by BristolUK
We're some way short of tax levels but we do our returns every year.

I quite enjoy it in a weird sort of way.

Do you think you're more likely to be audited (or whatever) if you don't file than if you do? Especially if returns suddenly stop?

Do you think we look perverted to the agency because we file each year?
Not filing a tax return is not a reason for an audit. If you don't file a return and the CRA have any concerns they send you a letter asking you to do so. This happens quite often. They can audit this return if they have any suspicions.

I always advise people to file their returns on time, pay their taxes on time and fly under the CRA's radar.
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Old Dec 15th 2010, 5:48 pm
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Default Re: I need the joy of learning how CAD income tax works!

Originally Posted by BristolUK
I quite enjoy it in a weird sort of way.
Me too. I'm nerdy enough to like to see the numbers worked out nicely and written down without any doubts.
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Old Dec 15th 2010, 6:29 pm
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Default Re: I need the joy of learning how CAD income tax works!

Originally Posted by Almost Canadian
I dunno about that, there is nothing stopping your average Joe from filing anytime between the New Year and the end of April is there? Receipt of T4s accepted
Its the bit in bold that stops most people. Once I have it and the ones from the bank regarding interest I file ASAP and have the refund shortly afterwards.

I do agree with dbd that everyone filing at once is stupid. Why not split it over 12 months based on SIN number, or Surname or something?
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Old Dec 15th 2010, 7:42 pm
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Default Re: I need the joy of learning how CAD income tax works!

Originally Posted by iaink
I do agree with dbd that everyone filing at once is stupid. Why not split it over 12 months based on SIN number, or Surname or something?
You just sent me back to the 1970s in the DHSS with the National Insurance Card exchange (with stamps!) done 4 times a year according to the suffix of the NINO.
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Old Dec 16th 2010, 8:52 pm
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Default Re: I need the joy of learning how CAD income tax works!

Originally Posted by theotherlebowski
thanks guys

it seems like a staggeringly inefficient and cumbersome system to me but then i'm not an accountant! seems like it's one thing systemically that the UK kind of got right...
Actually once you have become accustomed to the Canadian tax system you will realize its purpose. The Canadian tax system provides a vast amount of ways to save money on tax. These are called tax credits. The system is also set up to tax people based upon their indiviudal circumstances rather than their salary. Therefore a spouse that supports another spouse is allowed additional deductions, people with kids under 18 pay less tax, you don't pay tax on daycare fees, union dues, tution fees etc. You are rewarded for saving for your retirement. The system from what I can tell is much more fair yet more complicated than the british tax system. Most small companies don't have the proper staff to be able to effectively and accurately determine each individuals correct tax rate. As such individuals file their taxes once a year.
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Old Dec 20th 2010, 4:27 am
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Default Re: I need the joy of learning how CAD income tax works!

Originally Posted by theotherlebowski
thanks guys

it seems like a staggeringly inefficient and cumbersome system to me but then i'm not an accountant! seems like it's one thing systemically that the UK kind of got right...
Well I was one of the millions of people that has been let down by the UK PAYE system this year. Given the system had all the returns from both my incomes they still decided to take two years to press update on the computer that then said I owed money. Not very impressed with PAYE. It does not work with dual income and gets screwed up when you approach higher rate tax bracket.

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