The Mysticism of Income Tax Refunds
Every taxpayer hopes for a tax refund. We explain to our clients that an income tax refund most often, is simply a return of your own money. For employees, your employer is obligated to remit income tax to CRA from each and every paycheque. Employers must follow payroll tables sent out by CRA. If you claimed no tax credits (other than the personal amount) and no deductions on your tax return, then most often, your tax return should result in approximately a nil balance owing or refund because your employer would have remitted the correct amount. It is the claim of certain tax credits (e.g., spouse amount, eligible dependent amount, tuition, donations or medical being the most common) or certain tax deductions (RRSPs, spousal support paid and child care being the most common) that result in a tax refund for most taxpayers. When these claims, not anticipated by the income tax remitted by your employer (unless you filled out a TD1 at work specifying the claim of any of these) are made, then you will likely receive a tax refund.
Remember, that this refund usually is the return of your own monies earned, previously remitted by your employer, that CRA has been holding refunded to you at 0% interest. Although a tax refund is the “dream” of every taxpayer, you are just getting back more of the money you worked so hard for in the previous year. Education rather than hope and prayer will help you understand and tax plan for that extra windfall come tax time.
“Let Us Worry About Your Taxes, So You Don’t Have To!”
Call (403)703-7176 or email Sharon@CalgarysChoiceTaxServices.com for help with your tax planning.