How Not to Do Your Taxes in Canada

by Anonymous

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).

Support The Billfold

The Billfold continues to exist thanks to support from our readers. Help us continue to do our work by making a monthly pledge on Patreon or a one-time-only contribution through PayPal.