TORONTO, Oct. 22 /CNW/ - When it comes to tax knowledge, Canadians just
aren't making the grade. On a recent Mackenzie Financial Great Canadian Tax
Test conducted for Mackenzie by Leger Marketing, the average Canadian was only
able to answer 3 out of 10 questions correctly.
Canadians scored even lower than they did in a comparable tax test
conducted by Mackenzie Financial two years ago. In that one, similar to this
style of 10 True or False questions, the average was 6 out of 10 correct
This year's tax test incorporated many questions pertaining to the new
changes to the Canadian tax system.
"People don't wear outdated fashions or rely on outdated medical
techniques so why would they live with outdated tax planning," says Sandy
Cardy, Senior Vice President of Tax and Estate Planning for Mackenzie
Financial. "Since we conducted our last tax test, there have been many tax
modifications that can help put money back in our pockets. Canadians should
speak to a financial advisor to make sure they are taking full advantage of
the newly allowed deductions and credits."
How Canadians scored on The Mackenzie Financial Great Canadian Tax Test:
Mackenzie asked a survey of 1,536 Canadians the following ten True or
False questions. The correct answers and the percentage of people who answered
correctly are shown in brackets.
1. "You are only allowed to contribute to a Registered Retirement Saving
Plan (RRSP) up to the age of 69." False. (20% Correct).
2. "The limit to what I can contribute to my child's Registered
Education Savings Plan (RESP) each year is $4,000." False. (17%
3. "A 65-year-old may allocate up to 50% of their Registered Retirement
Income Fund (RRIF) income to their spouse or common law partner."
True. (42% Correct).
4. "If a parent transfers an asset into joint ownership with an adult
child, future income taxes are split 50/50." False. (19% Correct).
5. "You can pay for an adult child to take care of younger children in
your household and deduct the cost of child care expenses." True.
6. "Net capital losses realized in a given year may be carried back to
any of the three preceding tax years." True. (40% Correct).
7. "You can reap the benefits of a donation to a charity on your 2007
tax return provided the donation is made by March 1, 2008." False.
8. "If I redeem or sell units of my non-registered mutual fund in 2007,
I will have to include 50% of any realized gain in my 2007 tax
return." True. (28% Correct).
9. "If I donate publicly listed stock, for example BCE stock, to
charity, I can avoid paying tax on the capital gain no matter how
long I've held it." True. (21% Correct).
10. "I can claim a tax credit for 2007 of up to $500 for each child under
16, who registered this year in a qualified physical activity." True.
The survey found several important regional variations, including:
- Quebeckers scored the lowest - 41 per cent scored one out of ten or
under on the tax test
- Atlantic Canadians were the second lowest group - 89 per cent scored
5 out of ten or less
- Manitobans/Saskatchewanians scored the highest - 4 per cent scored 80
per cent or higher on the test
- Ontarians are the group of Canadians that score right in the middle -
12 per cent chose 5 out of ten
- Albertans and Manitobans/Saskatchewanians reflect the rest of the
nation as the provinces most likely to get 3 out of 10 answers
correct at 17 per cent each
- British Columbians appear to be the group most savvy about mutual
fund taxes - 40 per cent answered question 8 correctly, trumping the
national average of 28 per cent
The survey results are based on a Leger Marketing national online survey
with a representative sample of 1,536 Canadians (18 years and older) between
September 26th and October 1st, 2007. A sample of this size will provide
results that can be considered accurate for the population overall to within
plus or minus 2.5 per cent, 19 times out of 20.
For further information:
For further information: Jessica Davidson, Environics Communications,
(416) 969-2735, firstname.lastname@example.org; Catharine Marion, Environics
Communications, (416) 969-2809, email@example.com