The annual ritual that most readers share each spring began last Monday with the flick of a switch. Tax season is now officially upon us.
While people can send in a tax return all year to the government, in fact, there are times that returns are not assessed, primarily because of system maintenance.
The one time that affects most of us concludes on the second weekend of February each year. Think of it as the time when someone in Ottawa turns on the switch so that the latest tax filing year — 2011 in this case — can start to be processed.
Many of us might rationalize it as a time when we send our tax dollars to Ottawa, but for the most part it has them already. Employers remit the dollars they collect from your pay on a routine basis, no less than each month on the 15th, and those not subject to this kind of collection generally will send along their own estimated calculation each quarter.
So, one is better to consider this as a reckoning — a final accounting of who owes what, and to whom. For those of us who have paid too much, a refund is due — usually much needed. And if we owe? Well, that’s what April 30 is for!
At this time of year, I often like to peruse the latest numbers I can get my hands on from a broad variety of sources and I thought I’d share a few facts with you.
Don’t think that income tax is going to be eliminated soon. In 2009, these taxes made up 65 per cent of the total federal revenue. Consumption taxes accounted for the next largest single category — just 18 per cent.
And we’re all in this together. You and 25,359,067 other Canadians filed a return last year. Of that number, almost 54 per cent chose to hand the tax preparation job off to a third party. Nationally, about 33 per cent of us still file a paper return. The rest have turned to the various electronic options.
Telefile, the telephone option that was first piloted in the Maritimes back in the 1990s, is the least-used automated process and accounts for only 366,000 filings.
Netfile, where you electronically file your tax return to the government, had 5.2 million participants last year, or 45 per cent of all self-filed transactions.
Tax professionals and other third-party filers have voted overwhelmingly for EFILE, selecting this method more than 82 per cent of the time.
Our tax returns here in the province are submitted to the taxation centre in St. John’s, N.L. We have two tax services offices — Halifax and Sydney.
Provincial returns are collated through the Halifax location and these numbers are available as well. For instance, there were 715,155 returns filed in the province last year. Just over 50 per cent of those were filed by a third party. Slightly more than 30 per cent were filed on paper the old-fashion way.
What does the Nova Scotia tax profile look like? For the 2009 tax year, there were 730,000 returns filed. Of those, 505,000 were taxable, which means that more than 30 per cent were filing probably for benefit purposes.
The average income of the taxable returns was $47,229. This fell to $35,657 when one calculates the total individual provincial income against all filed returns.
And in case you’re wondering, the average income in Canada in 2009 among taxable returns was $56,974. When one factors in the average income across the filing spectrum, the national average is $40,506.
Next time we’ll take some time to investigate the way we spend our income, or at least what we tell the folks at the Canada Revenue Agency on our tax return.
Roger Haineault is with Tax Filers here in HRM. His column appears Saturday.
