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BMO Harris Private Banking

BMO Harris Private Banking

April 12, 2011 04:00 ET

BMO Survey: Canadians Adopt "Do-It-Yourself" Attitude This Tax Season

- Almost 60 per cent of Canadians do their own taxes or have a friend or family member do it for them

- The overwhelming majority of respondents who do not seek professional help are confident that they are maximizing their tax refund

- Almost two-thirds are filing their tax returns electronically

TORONTO, ONTARIO--(Marketwire - April 12, 2011) - Despite the anxiety that often accompanies tax season, results from a study released today by BMO Harris Private Banking indicate that a clear majority of Canadians are comfortable doing their own taxes and are confident that they are doing a good job.

Rather than hiring a professional to assist with their taxes, 59 per cent of Canadians are either doing their own taxes or having a friend or family member help them out.

An overwhelming 86 per cent of those who fall into this group feel confident that they are maximizing their refund by taking advantage of all tax credits and programs available to them.

"It's encouraging to see that Canadians have adopted a do-it-yourself, self-reliant attitude when it comes to preparing their own taxes, but there are instances where it makes sense to seek the help of a professional," said John Bathurst, Vice-President, Wealth Services, BMO Harris Private Banking. "Expert advice can help simplify matters, and, more importantly, help individuals and families identify benefits that otherwise could have been missed."

Mr. Bathurst added that a tax professional can also help individuals who may have inadvertently claimed deductions to which they are not entitled, thereby creating an unfounded expectation of a tax benefit.

When should you seek the help of a tax professional? BMO's John Bathurst provides the following scenarios:

  • Rental properties – There are often costs that can be deducted from net rental income. An area that often requires analysis is the difference between repairs and maintenance expenses and capital improvements. If you own a rental property, a tax expert can help you determine the appropriate status of your rental costs and maximize your deductions.
  • Job relocation – If you have moved your home for work or business reasons, there are specific tax rules related to moving expenses that could benefit you. Knowing the rules ahead of time can allow individuals to plan their move and retain records that will maximize their deductions in this area.
  • Change of marital status – If your marital status has changed within the tax year, and you are required to make payments to or receive payments from your previous spouse, a financial expert can ensure you are filing in accordance with the agreements that had previously been reached.
  • Certain categories of employment – You may need a tax professional's help if you are required to pay expenses related to your employment. Often, commission-based employees face a labyrinth of rules with expenses related to transportation, entertainment, home offices, supplies, salaries of assistants and other related expenses. Come tax season, you will face the daunting task of determining which costs can be deducted. Professional advice can save you time and provide assurance that your tax return is filed claiming the maximum appropriate deductions.
Other key findings from the survey include:
  • Women are more likely to ask a friend or relative do their taxes compared to men (22 per cent versus 15 per cent)
  • Close to two-thirds of Canadians (64 per cent) file their tax return electronically
  • Those who are married are more likely than those who are single to file electronically (70 per cent versus 54 per cent)

The online survey was conducted by Leger Marketing from March 28 – March 31, 2011, with 1501 Canadian adults.

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