Canadians score C on CIBC’s tax test
Only 19% received an A grade and many could leave money on the table come tax time
TORONTO, April 20, 2022 /CNW/ – Towards the due date for this year’s personal income tax May 2, 2022CIBC tested Canadians’ knowledge to assess their understanding of a range of tax scenarios and found that there were 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 essential not only to file your return accurately, but the more tax knowledge people have, the better they can take advantage of applicable tax deductions and credits that may, in some cases result in cost savings,” mentioned Jamie GolombekManaging Director, Tax and Estate Planning, CIBC.
Among the most common scenarios Canadians were asked in the test, many were split (50%) on whether someone can give their child a tax-free gift of any amount (they can). Another question of whether a spouse or partner is responsible for their partner not filing their tax returns tripped up some respondents, with 49% believing they could be held responsible.
“A lot of Canadians would need a tax reminder,” added Mr. Golombek. “There is still some confusion around topics such as inheritances, gifts and spousal liability.”
To help Canadians better plan and prepare their tax returns, CIBC offers free resources from leading experts such as Jamie Golombek. For more information, talk to your advisor or visit our Tax Strategies website.
The most common misunderstandings among Canadians
32% think lottery winnings are considered taxable income
46% believe an inheritance received by a Canadian resident is not tax-free
50% think you can’t give your child a tax-free gift
36% think laser eye surgery is not an eligible medical expense
True or False test questions:
Withdrawals from a Registered Retirement Savings Plan (RRSP), other than for education or buying a first home, are taxable. (True, 85% correct)
Lottery winnings are considered taxable income. (Fake, 68% correct)
Receipts and records must be kept for 6 years for tax purposes. (True83% correct)
Laser eye surgery is an eligible medical expense. (True64% correct answers)
Moving expenses can be a valid tax deduction if you moved for work or school. (True85% correct)
Selling a personal item worth less than $1,000, online, is a taxable transaction. (Fake72 percent correct)
It is possible to make an adjustment to your tax return after filing. (True83% correct)
You are responsible if your spouse does not file their tax returns. (Fake51% correct answers)
You can give your child a tax-free gift of any amount. (True50% right)
An inheritance received by a Canadian resident is tax free. (True54% correct answers)
CIBC is a leading North American financial institution with 11 million personal, commercial, public sector and institutional banking customers. In Personal and Small Business Banking, Commercial Banking, and Wealth Management and Capital Markets, CIBC offers a full range of advice, solutions and services through its leading digital banking network and locations across Canada, United States and around the world. Current press releases and more information about CIBC are available at https://www.cibc.com/en/about-cibc/media-centre.html.
This Maru public opinion survey conducted on behalf of CIBC was conducted by the sampling and data collection experts at Maru/Blue. 1,515 randomly selected Canadian adults who are Maru Voice Canada online panelists were interviewed by March 31 to April 1, 2022. The results of this study were weighted according to education, age, gender and region (and in Quebec, language) to match the population, according to census data. This is to ensure that the sample is representative of the entire adult population of Canada. For comparison purposes, a probability sample of this size of full-time employed respondents used in this study has an estimated margin of error (which measures sampling variability) of +/- 3.0%, 19 times out of 20. or between totals when compared to data tables are due to rounding.
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