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BMO Harris Private Banking

BMO Harris Private Banking

May 09, 2011 09:41 ET

Tax Refunds Are Arriving-What Will Canadians Do With Them?

- BMO survey shows more than one-third plan on paying bills with their refunds

- More than one-fifth plan on using their tax refunds to invest in their RRSPs or TFSAs

- BMO offers tips on how to make the most of your tax refund and start planning for the 2011 tax season

TORONTO, ONTARIO--(Marketwire - May 9, 2011) - With the 2010 tax deadline now past, many Canadians are already starting to receive their refunds. According to the Canada Revenue Agency, the average tax refund exceeded $1,400 for the 2008 tax year.

While 17 per cent of Canadians do not anticipate receiving a tax refund, according to a BMO Harris Private Banking survey, of those who will receive one, more than half (56 per cent) say they will use their refunds to pay bills and credit card balances or use it to invest.

"Depending on your short and long-term financial goals, Canadians have many options when it comes to where to put their tax refunds," said Sara Plant, Vice-President and National Director, Wealth Services BMO Harris Private Banking. "It is important to sit down with a financial planner who can assess your individual situation and put a plan in place that works for you. Whether it be investing in an RRSP or putting it towards home renovations, receiving a tax refund can be a great reason to re-visit your financial plan and goals."

The survey also found that:

  • Women are more likely to use their tax refund to pay bills compared to men (39 per cent vs. 31 per cent)
  • Men are more likely to use their tax refund to invest in their RRSP or TFSA compared to women (24 per cent vs. 17 per cent)
  • Additionally, those with children are more likely to use their tax refund to pay bills compared to those with no children (44 per cent vs. 31 per cent)

Wondering what to do with your tax refund? BMO suggests the following options:

  • Have your tax refund grow tax-free in a TFSA
  • Make a contribution to your RRSP
  • Pay down your mortgage or add value to your home with a renovation
  • Pay off debt or credit card bills
  • Contribute to your child's RESP

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

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