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A thorough analysis of today’s financial news—delivered weekly to your inbox or via social media. As part of Knowledge Bureau’s interactive network, the Report covers current issues on the tax and financial services landscape and provides a wide range of professional benefits, including access to peer-to-peer blogs, opinion polls, online lessons, and vital industry information from Canada’s only multi-disciplinary financial educator.
March 2023 Poll
The average refund for the first filing month, February, 2023 was $2,295. Should CRA cut back on withholding tax requirements?
Interest Rate Challenges: Should CRA Give Taxpayers a Break? January Poll Results
High interest rates continue to squeeze borrowers and taxpayers. Last week, the Bank of Canada announced it’s eighth interest rate increase in 12 months to 4.5%. The prescribed interest rate charged by CRA on overdue taxes also rose this month to 8%; not quite as high as the 9% rate that began in the fourth quarter of 2006 where it stayed until the second quarter of 2008. In our January poll, KBR readers were asked: should CRA temporarily reduce this 8% rate to give taxpayers an inflation break? The vote is in: 78% to 22% said yes, with a number of interesting comments:
Tax Filing Milestones - February and March
It’s that time of year. Mark your calendar for these important tax filing milestones:
$1.5 Billion Goes Unclaimed Due to Canadians Not Filing Their Taxes
In a paper titled The Mystery of Unclaimed Tax Benefits published in 2020 the authors found that about 10 to 12 per cent of Canadians don't file their tax returns. And if we look back almost a decade ago (2015) researchers estimated that the benefits lost to working-age non-filers was about $1.7 billion. That number has to be higher today, especially with all the new inflation protection measures being announced recently.
Deadline January 30: Interest on Spousal Loans
Did you set up an inter-spousal loan to do some investment income splitting last year? You would have been wise to do it within the first two quarters of the calendar, when the prescribed interest rate was 1% – compared to 4% today. Also wise: The borrower must pay the lender the interest by January 30 – less than a week away – or the arrangement will be nullified.
Tax Season 2023 - Get Those Auto Logs Ready!
Taxpayers who claim auto expenses, commonly commission sales people, the self-employed and employees who wish to reduce their annual auto standby charge on their employer-provided vehicle, will know that keeping an auto log is mandatory to succeed in a CRA review of their tax filing. But after a “pandemic holiday” on keeping strict records, tax filers will have to create a new base year log to meet audit requirements.
