TurboTax<\/a>, spokesperson and CPA Stefanie Ricchio explained that tax refunds are received by first filing your taxes. After entering your sources of income, deductions and non-refundable tax credits, \u201cIf in that year, you ended up in a situation where you paid more in tax for the year than you technically should have because of your deductions and your credits, then the CRA issues you a tax refund.\u201d On the other hand, if you didn\u2019t pay enough tax on earned income, you would owe taxes.\u00a0<\/p>\nWhat once felt like an annual bonus is now the last hope for Canadians to get by amid inflation and high living costs.<\/p>\n
Now Toronto went outside to ask Torontonians about their thoughts on the statistics and their experience with tax refunds.<\/p>\n
Read More<\/p>\n
Toronto resident Diana said she wasn\u2019t surprised, because she was also relying on that this year. \u201cUnfortunately, I will not be getting a tax refund\u2026 I guess I owe more than I thought that I owe,\u201d she said.<\/p>\n
Without this refund, she explained that she needs to \u201cmake some loud, big cuts.\u201d She was also relying on the tax refund to pay off her credit card, which has now prolonged that process.<\/p>\n
The federal government will raise the minimum wage to $18.15 starting April 1 to keep up with inflation, but Diana jokes that she\u2019s not an economist, but \u201cif we\u2019re going to use minimum wage as the baseline of what\u2019s required to survive, then it definitely needs to be raised.\u201d<\/p>\n
Ricchio recommended to Diana to find out as early as you can how much you owe to be able to put money aside to make the payments. She added, \u201cEven if you can\u2019t make the full payment, you want to file, so that at least you don\u2019t get hit with a late filing penalty.\u201d She explained, \u201cSo even if you put down 25 per cent of the amount you owe, it\u2019ll reduce your interest.\u201d\u00a0<\/p>\n
And Diana\u2019s not alone in this, TurboTax data shows that 69 per cent of Canadians that were surveyed say that they would be financially impacted if they don\u2019t receive their expected tax refund this year.\u00a0<\/p>\n
Rommel, another Torontonian, said it is unfortunate Canadians must depend on tax refunds to survive.<\/p>\n
For him, a tax refund helps extend the reach of his spending, but it shouldn\u2019t be a necessity for survival. \u201cIt\u2019s really unbudgeted and you\u2019re not able to forecast your spending for that,\u201d he added.<\/p>\n
\u200bRommel believes the new minimum wage might help, but not enough. \u201cInflation is increasing and it\u2019s not commensurate with the increase. It\u2019s not catching up like the rising cost of shelter, as well as goods and other costs.\u201d<\/p>\n
Once receiving the tax refund, Ricchio recommends using it to pay off debt, saving it into an emergency fund.\u00a0<\/p>\n
In the past, the refund would be used almost as a \u201cbonus,\u201d Ricchio explained. \u201cI would hear a lot more of, \u201cI\u2019m going to use this to go on vacation, I\u2019m going to use this to do a little something around the house or I\u2019m gonna buy myself something that I\u2019ve been waiting to buy on.\u201d Now, Ricchio explains people use it as a necessity because of the climate the economy is in right now.\u00a0<\/p>\n
To maximize the initial tax refund amount, Ricchio recommends filing on time. TurboTax data showed that their users 25 and under get an average refund of $4,822. For other age brackets, refunds can also be associated to the Canada groceries and essentials rebate, Canada\u2019s child benefit, and to keep in count if you\u2019ve done charitable donations or paid for medical expenses out-of-pocket.\u00a0<\/p>\n
\u201cAll of these little things can add up, even if it\u2019s just a few hundreds to put into, back into your your tax situation, either to reduce a balance owing or to increase a refund that\u2019s coming your way,\u201d Ricchio said.\u00a0<\/p>\n
But these statistics don\u2019t surprise Torontonian Santiago. \u201cIt\u2019s honestly sad because you should not be relying on tax refunds\u2026 Your salary should be enough for you to survive, so that is concerning.\u201d<\/p>\n
Santiago adds that Canada has one of the highest inflation rates among G7 countries and calls on the government to investigate. \u201cIt\u2019s always nice to have [tax refunds], but you should not be needing that to survive. So there\u2019s always an imbalance, probably, in costing the city against wages.\u201d<\/p>\n
Ricchio added, \u201cWe\u2019re somewhat at the mercy of the cost of groceries and the cost of fuel\u2026 There\u2019s not a lot we can do about that. So look for the areas within your expenses that you do have some control, like unnecessary subscriptions or eating out of home too much.\u00a0<\/p>\n
She recommends looking at the numbers of what you\u2019re spending on a monthly basis and figure out what spending you can pull back on.\u00a0<\/p>\n
But Toronto resident Jun gives tough love to Torontonians who rely on their tax refunds. \u201cI feel like [tax refunds] belong to [me], so I\u2019ll just get it later. Affordability is a big issue here, so people need to learn how to use their money in a smart way.\u201d He added, \u201cIt\u2019s tough. Life is tough.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"What to know A new study finds 40 per cent of Canadians rely on their tax refund to…\n","protected":false},"author":2,"featured_media":566520,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,10262,46,135,65836,174026,218252],"class_list":["post-566519","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-cost-of-living","tag-economy","tag-inflation","tag-minimum-wage","tag-tax-return","tag-turbotax"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/566519","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=566519"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/566519\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/566520"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=566519"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=566519"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=566519"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}