IG Wealth Management Study: Despite The Benefits, Canadians Find Seeking Year-Round Tax Advice…Too Taxing Français
- Only one-fifth of Canadians make tax planning a priority throughout the year
- Two-fifths do not consider tax implications or financing options when making major purchases
- 85 per cent of Canadians believe getting a tax refund is a good thing- but is it?
WINNIPEG, MB, March 23, 2023 /CNW/ - According to IG Wealth Management's (IG) annual tax study, Canadians are missing a critical opportunity to optimize their tax returns because they do not have a year-round tax strategy.
The study, conducted in partnership with Pollara Strategic Insights, found:
- Only one-fifth (22 per cent) of Canadians make tax planning a priority year-round.
- Over one-third (36 per cent) think year-round tax planning is "not important at all".
- Just one-in-ten Canadians feel very confident that they take advantage of all tax credits available.
"Everyone who pays taxes can benefit from year-round tax planning as part of their larger financial plan, especially these days given the cost-of-living crisis and a higher interest rate environment," said Damon Murchison, President and CEO at IG Wealth Management. "It's concerning that most don't think about a tax strategy until tax time. Making tax planning a regular activity can help reduce your overall tax bill and help you take advantage of all available tax deductions and credits, allowing you to keep more of your income in your own pocket."
The study also found that, when it comes to making a major purchase, such as a home, a secondary property, home renovations or a car, two-fifths (42 per cent) of Canadians do not consider the tax or financing implications of the purchase.
"Scrambling to make sense of your assets at tax time is inefficient for you and your money," noted Mr. Murchison. "It's important to seek out the help of a financial advisor who can help you understand, in advance, the tax implications of larger, more complicated assets and how they fit into your overall financial plan."
The study further revealed that 85 per cent believe a tax refund is a good thing, with 60 per cent of Canadians taking steps to try to increase the amount they will get back each year. More generally, Canadians reported that they plan to use their tax refund as a "bonus", with over half (57 per cent) taking the money to treat themselves or their family and 44 per cent incorporating the refund into their investment strategy.
"Contrary to popular belief, having a larger tax refund is not necessarily a good thing," said Mr. Murchison. "A tax refund means too much tax was collected from you over the course of the year. Although it might feel nice to receive that money after you've filed, you have lost out on interest, investment, and spending opportunities throughout the year. A financial advisor can create a comprehensive 12-month tax strategy that will help you be more tax-smart over the course of the year, ultimately putting you that much closer to reaching your financial goals."
This study was conducted with an online sample of 1,535 Canadians aged 18 years or above who are not retired and was conducted between February 15 to 21, 2023. Results of the study were weighted by region and gender to be representative of the population as a whole. The margin of error on a probability sample of this size would be +/- 2.5%, 19 times out of 20.
Founded in 1926, IG Wealth Management is a national leader in delivering personalized financial solutions to Canadians through a network of advisors located across Canada. In addition to an exclusive family of mutual funds and other investment vehicles, IG offers a wide range of other financial services. IG Wealth Management has $115 billion in assets under advisement as of February 28, 2023 and is a member of the IGM Financial Inc. (TSX: IGM) group of companies. IGM Financial is one of Canada's leading diversified wealth and asset management companies with approximately $258 billion in total assets under management and advisement as of February 28, 2023.
SOURCE IG Wealth Management
English Media Inquiries: Hilary Bassett, 416-951-7558, [email protected]; French Media Inquiries: Maria Bello Vega, 514-713-6577, [email protected]
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