Our government should complete your tax return for most Canadians, writes Peter Watson.
The annual ritual of completing your personal income tax return and submitting it before the end of April for many is a waste of time and effort and money.
I would like our federal government to automate this process for most Canadians because their return is simple.
The idea for this article came from a conversation I had with someone a few weeks ago. Their comments were if you make a mistake completing your income tax for example misstating interest earned on a bank account, the government will respond to your tax filing pointing out this error.
The thought was if the government has this information why doesn’t it just complete the form themselves. I agree.
The government is given much of your financial information by various organizations. Your employer reports your income, banks report any interest earned, investment dealers any interest, dividends and capital gains.
Taxpayers with a more complicated scenario would have to provide additional information for example business or real estate rental income.
It is in your best interest to review your income tax details in order to tax plan for future years to make use of all options to reduce your tax that the federal government provides.
Tax time is generally not a good time for tax planning because at that time of year often your main concern is just filing your tax return on time to avoid any penalty, and your accounting professional does not have extra time during busy tax season while they work with other clients to submit tax returns.
For many having the government file your income tax return would save time, aggravation and potentially accounting fees.
Several other countries provide the service, and it is a good idea for Canada to do this as well.
Peter Watson, of Watson Investments MBA, CFP®, R.F.P., CIM®, FCSI offers a weekly financial planning column, Dollars & Sense. He can be contacted through www.watsoninvestments.com
