Tax Tip Thursday

This week we are going to talk about peoples’ perceptions of what the outcome of their taxes should be. Like whether they are getting a tax refund or will owe taxes, and how much money it will be in either case.

Depending on what you do for a living and the intricacies of your tax return, I may or may not be able to have an influence on the outcome. Many people give me too much credit in this regard — or worse: too much blame!

I cannot tell you how many times people have complained to me about the outcome of their taxes and been unhappy with me as a result. Unless you are self employed or have a complicated tax situation, we really do not have a lot of influence over the outcome. If you have employment income primarily, the outcome of your taxes is predicated on how much you earned and how much your employer deducted. If they deducted too much, you will get a refund. If they didn’t deduct enough, you will owe. Unless there are other variables like RRSPs or other investments or sources of income, there is not much that is going to change this. If you have one employer throughout the year, the outcome is usually pretty straightforward. Employers are usually good at deducting approximately the right amount of money, so whether you owe taxes or are receiving a refund, the amount will probably be small.

Exceptions

There are, of course, some circumstances where your taxes may not work out as expected even if you are an employee. For example, if you:

• change employers part way through the year,
• miss a few weeks or months of work,
• collected CERB,
• were unemployed,
• collected unemployment insurance,
• worked significant overtime hours,
• or held part-time jobs,

then you could find yourself with some surprises at the end of the year, and they might not be very pleasant.

Our Services

Like I said, there is only so much I can do to change the outcome of your taxes if your tax situation is relatively simple. However, if you are self-employed or have an otherwise complicated situation, there might be some ways we can change things! Either way, it never hurts to have a professional review your taxes to make sure you’re not missing anything. Book an appointment today to get started!

Disclaimer:

This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal or tax advice nor can it or should it be relied upon. All tax situations are specific to each individual. If you have specific tax questions you should book an appointment for a 1 on 1 consultation.