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Canadians express confidence on tax knowledge

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An overwhelming majority of Canadians are feeling confident that their 2013 tax returns will take advantage of all the tax deductions, tax credits and other tax savings that may be available to them.

So reports BMO Nesbitt Burns in its fourth annual national tax study. The survey was conducted by Pollara between March 14 and March 17, 2014 with an online sample of 1,007 Canadians.

The research indicates that 70 percent of Canadians plan to file their taxes before the April 30 deadline, with 25 percent having already filed.

The study also finds that, when Canadians were asked how knowledgeable they felt about issues related to their tax returns, they felt the most aware of how their income is taxed generally (77 percent) and the tax implications of contributing to a Registered Retirement Savings Plan (75 percent).

However, they are less confident of their understanding how investments are taxed, with only 41 percent reporting that they are familiar with how capital gains and dividend income are treated from a tax perspective.

The study also examined what those who expect a tax refund plan to do with the money:

37 percent will cover household bills and/or reduce their debt load (credit card balances and debt other than mortgage);

28 percent will save or invest;

13 percent will fund vacations or purchase leisure items;

11 percent will do home renovations;

Less than 10 percent have decided to pay down their mortgages; and

3 percent will donate to charitable causes.

Regional Breakdown:
Region Plan to file before April 30 deadline (in addition to the 25% who’ve already filed) Confident that their return takes advantage of all the tax deductions, credits, etc. available to them Plan to use their tax return to pay household bills and/or reduce their overall debt load
National 70 90 37
Atlantic 68 88 50
Quebec 63 90 32
Ontario 76 91 37
Prairies 66 89 40
Alberta 71 91 33
B.C. 68 86 38