More than 85 per cent of Canadians are unsure about the meaning of key tax jargon, a new survey says.
Tax season can be an overwhelming time for everyone, and if you’ve ever found yourself puzzled by jargon like “write-off,” “credit,” “deduction,” or “basic personal amount,” you are not the only one.
A study conducted by TurboTax found that only 14 per cent of Canadians feel “very confident” in their understanding of tax-related terms.
According to the survey, 27 per cent of Canadians have never heard of the term NETFILE.
And 50 per cent of Canadians believe that at a minimum, an intermediate English-language proficiency is required to understand a list of common tax terms.
Only 12 per cent of people surveyed said they were taught tax terminology in school. A further 12 per cent said they learned via online platforms, 16 per cent by asking a friend or family member, and 19 per cent through tax filing software.
Forty-two per cent of respondents said they feel only somewhat confident in their ability to file their taxes accurately to maximize their tax return.
Turbotax has compiled a list of key Canadian tax terms that residents should be aware of:
CRA
The Canada Revenue Agency, which is responsible for collecting taxes and providing different credits and benefits to Canadian citizens. They receive your tax claims, calculate your return, and send you a Notice of Assessment.
Credits
These are dollar-for-dollar reductions on the income tax you owe, and are usually offered by the government to encourage Canadians to make financial decisions that benefit the economy or environment.
Deductions
Similar to credits, deductions are amounts that add to your expenses throughout the year that can be used to reduce the amount of tax you have to pay. Some examples include childcare expenses and donations.
Dependent
A dependent is someone who is dependent on you for support at any point during the tax year. This term most often applies to children, but may also refer to seniors or individuals with specific circumstances that make them dependent on you and your income.
Investment
Any place where you’ve placed money in hopes that it will lead to a profit. There are many different types of investments, from stocks and bonds to real estate and crypto. Depending on the types of investments you’ve made, you might be eligible for one or more tax credits.
NETFILE: A digital tax filing service that allows you to file your taxes and send your tax return directly to the CRA.
For the full list, visit Turbotax’s website here.
The deadline to file taxes for the 2023 tax year is April 30, 2024.
For the TurboTax poll, 1,533 randomly selected Canadian adults were surveyed on March 21 and 22.The results have been weighted by education, age, gender and region to match the population, according to Census data.
A probability sample of this size has an estimated margin of error of plus or minus 2.5 per cent, 19 times out of 20.
