Quote:
Originally Posted by DoubleF
Final returns and trust returns scenarios are complicated AF. CRA gives the option for filing taxes in multiple ways to address the multiple situations and circumstances that pop up (ie: Terminal, estate and trust returns). Many people are getting lost and basically paying tons more in taxes than they need to. (ie: Just because you can defer taxes on a rollover or delay taxes on a delayed transfer/deemed disposition, doesn't mean they should).
I'm not worried about CRA trying to implement auto-file or something similar. I think it's great for straight forward returns. I do warn people that the odds that these programs will essentially file the tax returns somewhat tax inefficiently and err in CRA's favor vs taxpayer favor is high. (ie: glazing over certain deductions, serious problems with data accuracy on certain slips even in this day and age and selecting the appropriate box of multiple boxes in situations such as a T4A for Calgary Co-op and scholarships). It's the taxpayers responsibility to optimize their taxes. CRA is shooting themselves in the foot if they optimize it for you.
People are too concerned about things like max tax rate. CRA could easily drop the top rates a few percent and with a few minor tweaks that most people would think are innocuous, walk away with more taxes than ever before. There are serious problems with our existing tax system that require an overhaul. It's currently disadvantageous to both CRA/DOF and taxpayers alike. But the CRA are working towards making sure it's disadvantageous to taxpayers instead of primarily them and the Department of finance. Tax reform is required to make it fair for all sides.
Taxpayers need to think more in terms of income inclusion rates/portion of income that is not included for tax purposes vs effective tax rates on certain transactions. Otherwise, they risk being penny wise, pound foolish.
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But the CRA isn't in charge, we are. So if the government decides auto-filing should also be optimized for returns(great campaign message), the CRA would have to implement that.And I know it wouldn't be easy as there are choices, but perhaps it would also help to work to eliminate those and simplify.