Blurb: By investing a little time you can learn a lot about how tax law affects you.
Where to find good tax information
Although most people don't realize it, everyone in Canada has a silent, greedy and spendthrift partner, who always has his hand in your pocket, even when you aren't looking.
That partner of course, is government, to whom the average Canadian will end up forking almost half of his lifetime earnings, in the form of various income, sales, real-estate and other taxes.
In fact, the government's cut of our national income is so large, that spending a little bit of time learning about how the income tax system works can yield substantial savings. To help we've listed a couple of the common sources of tax information.
The Canadian Income Tax Act
One of the most common versions of the act, the 2005 Stikeman Income Tax Act, --which lists at $86 on Indigo.ca,-- runs 3,200 pages of fine print jammed with clauses, sub-clauses, exceptions and sub-exceptions. Worse, the act is written in legalese, incomprehensible to the average Canadian. That said, the act is Canada's most important piece of tax legislation, and it is studied, consulted and reviewed by almost all of the people who work in the field of taxation.
Jurisprudence and commentaries
Tax experts also rely heavily on commentaries, opinions and articles of tax professors, lawyers and university professionals that are published in book form and sold by subscription or unit.
Make Sure It's Deductible is a great primer filled with tax tips for small business owners. The book includes sections on structuring your business in a tax efficient manner, maximizing home office and car related expenses and how to put your family members on the company payroll and still write off the cost.
Another great book is Jacks' Tax Savings for the Long Run, which gives Canadians tips on how to get the most value out of the money they spend on tax professionals. The book's premise is that the more than half of Canadians who pay professionals to compile their own returns do so for a reason.
But just handing your receipts to your accountant is not enough. If you don't also give him the right information he will not be able to do his job. This book gives you some tips on making sure that you are getting sound professional advice.
CA Firms' books and Web-sites
Canada Revenue Agency publications and Web-site
Unlike many Web-sites, Canada Revenue Agency's search feature
seems to work well and eliminates a lot of the time wasting back-and-forth
browsing that is typical among government sites. Another useful
feature is the fact that CRA seems to have uploaded most of its
information bulletins and circulars, which provide clarification
on the agency's stance in specialized areas.
Time well spent
Many tax professionals are good generalists, but less strong in specialized areas. So if you are for example a musician, and you take 20 minutes to read CRA's information dealing with musicians, chances are you'll know enough to be able to remind your tax accountant about the key issues of your particular profession. And since there is so much money at stake, it will be more than worth your effort.
Peter Diekmeyer (http://www.peterdiekmeyer.com/) is a Montreal based business writer.
|© 2005 Peter Diekmeyer Communications Inc.|