Possible Improvements in Tax Knowledge: Canadians Score C on CIBC Tax Test

With only 19% getting A grades, many can leave money on the table on tax return

Toronto, April 20, 2022 /CNW/ — approaching this year’s personal income tax due date May 2, 2022CIBC tested Canadians’ knowledge to assess their understanding of a range of tax scenarios and found gaps in understanding of important tax concepts.

Only 19% of Canadians scored 80% or higher on the 10-question quiz. The good news is that more people (41%) answered at least seven questions correctly.

“Having a good understanding of personal income tax is not only critical to accurately filing your tax return, but the more tax knowledge people have, the better they can take advantage of applicable tax deductions and credits, in some cases , which may result in cost savings,” mentions Jamie GolumbeckManaging Director of Tax and Estate Planning at CIBC.

Among the most common situations Canadians were asked about in the test, many (50%) were divided (50%) on whether anyone could give their children a tax-deductible gift of any amount (they could). Another question of whether a spouse or partner is responsible for their partner’s failure to file a tax return puzzled some respondents, with 49% believing they might be responsible.

“A lot of Canadians need tax reminders,” added Mr. Golombeck. “There is still some confusion on topics such as inheritances, gifts and spousal responsibilities.»

To help Canadians better plan and prepare their tax returns, CIBC offers free resources from leading experts such as Jamie Golumbeck. For more information, please consult your advisor or visit Our tax strategy website.

The most common misconceptions Canadians have

• 32% think lottery winnings are considered taxable income
• 46% believe estates acquired by Canadian residents are not tax-exempt
• 50% think you can’t give your child a tax-free gift
• 36% believe laser eye surgery is not an eligible medical expense

True and false test questions:

• Withdrawals from a Registered Retirement Savings Plan (RRSP) are taxable, except for education or the purchase of a first home. (real, 85% correct)
• Lottery winnings are considered taxable income. (Forged, 68% correct)
• For tax purposes, receipts and records must be kept for 6 years. (real83% correct)
• Laser eye surgery is a qualifying medical expense. (real64% correct answer)
• If you move for work or school, moving expenses can be a valid tax deduction. (real85% correct)
• sale value less than $1,000, online, is a taxable transaction. (Forged72% correct)
• Adjustments can be made to your tax return after submission. (real83% correct)
• It is your responsibility if your spouse does not file a tax return. (Forged51% correct answer)
• You can give your child a tax-free gift of any amount. (real50% correct)
• Inheritances received by Canadian residents are tax-exempt. (real54% correct answer)

About CIBC

CIBC is North America’s leading financial institution with 11 million personal, commercial, public sector and institutional banking customers. In personal and small business banking, commercial banking, wealth management and capital markets, CIBC provides a full range of advice, solutions and services through its leading digital banking network and branches across Canada, U.S. and around the world.For the latest press releases and more information from CIBC, please visit https://www.cibc.com/en/about-cibc/media-centre.html.

warn

The poll, conducted by Maru on behalf of CIBC, was conducted by Maru/Blue’s sampling and data collection experts. 1,515 randomly selected Canadian adults Maru Voice of Canada Online panelists were interviewed March 31 to April 1, 2022. The results of this study are based on education, age, gender and region (and in Quebec, language) to match populations based on census data. This is to ensure that the sample is representative of Canada’s entire adult population. For comparison purposes, the estimated margin of error (a measure of sampling variability) for the probability sample of full-time employed respondents of this size used in this study was +/- 3.0%, 19 times out of 20. Or when comparing totals between data sheets due to rounding.

SOURCECIBC