What are you doing with your income-tax return?
That is, if you’re getting one.
Some of us sad sacks aren’t getting a tasty little treat in the form of a money back from the government.
I have many a fond memory of blowing the couple hundred (sometimes a couple thousand) on silly stuff or things I thought I needed but really didn’t.
As time passed and I grew older and more responsible, though, tax time turned into an opportunity to pay down debt.
And that’s what more than half of Canadians are doing with their income-tax return this year.
According to a BMO Nesbitt Burns tax survey conducted in mid-March, eight in 10 Canadians expect to get a tax refund this year. The average individual tax refund, to date, has been $1,585.
Among the lucky ones getting a tax return, 37 per cent of them plan to use that cash to pay down debt.
Other responses included:
- Save or invest in a Registered Retirement Savings Plan or Tax Free Savings Account, 20%
- Home renovations, 7%
- Travel or luxury goods, 10%
It’s tempting to want to spend that money but John Waters, a vice-president and head of tax and estate planning at BMO Nesbitt Burns Wealth Planning Group, says Canadians aren’t thinking of their refund as a windfall any longer.
“This is really your money that the government has had and now they’re giving it back to you,” he said. “It’s refreshing to see that people are generally putting it toward investing or paying off the debt.”
I wanted to see if my friends were consistent with the poll results and I asked them on Facebook, “What are you doing with your tax refund this year?”
They’re taking their financial situation seriously, according to their responses.
- “Paid rent and bills.” K.B.
- “Sigh, going on the credit card.” N.J.F.
- “Home improvements (hardwood being refinished and cracked front step being repaired).” M.R.
- “Mortgage lump sum payment.” H.M.
- “Spending money for my trip to Vegas!” K.G.
- “Used it to pay part of my son’s hockey registration.” R.K.
- “Basement reno, or general house fixy-uppy stuff.” L.B.
If I had a refund coming this year, I’d probably be paying down debt and investing it into retirement income.
What are you planning on doing with your tax refund?
Can you help?
We sure can. Contact one of our tax specialists and we can help you find tax savings and get a bigger refund.
Fill out our contact form or give A1 Accounting a call at 403-226-8297.