Ahead of the looming tax filing deadline, it appears that many Canadians may be missing out on valuable opportunities to maximize their tax savings.
According to a recent study released by IG Wealth Management, only about one-third of Canadians feel "very confident" that they are making the most of all available tax breaks. This suggests that a significant portion of the population may be leaving potential savings on the table.
Damon Murchison, the president and CEO of IG Wealth Management, emphasized the importance of prioritizing tax planning beyond just the tax season. He noted that taking proactive steps to plan throughout the year could lead to reduced tax bills, increased utilization of tax credits and deductions, and ultimately, greater wealth retention.
Despite recognizing the importance of year-round tax planning, a large portion of respondents admitted that they do not make it a priority throughout the year. Only 27 percent of Canadians reported actively engaging in tax planning on an ongoing basis, potentially missing out on opportunities to optimize their financial situation.
Murchison stressed that integrating tax planning into one's overall financial strategy is crucial for maximizing savings and achieving long-term financial goals.
The study also delved into Canadians' awareness of tax implications associated with significant life events and major purchases. Surprisingly, only one-third of respondents indicated that they consider tax implications before making major purchases such as buying a home, a second property, or a car, or undertaking home renovations.
Furthermore, a mere 17 percent of respondents reported being familiar with how life events such as marriage, having children, retiring, or estate planning can affect their taxes. This lack of understanding regarding tax implications related to life changes is concerning, as it could lead to missed opportunities for tax optimization.
Murchison expressed concern over the widespread lack of awareness regarding tax implications associated with major life events and purchases. He emphasized the importance of seeking guidance and understanding the potential tax consequences before making significant financial decisions.
The study's results were based on an online survey of 1,229 adult Canadians conducted between February 15 and February 28. These findings underscore the need for increased education and awareness regarding tax planning strategies and their impact on Canadians' financial well-being.
