Thursday, March 14, 2013

Tax Deadline

Have you ever paid income taxes on money you never received? I have, and in both countries. The rules in both countries state that you must pay income taxes for money earned in that taxation year. For example, if you have a simple term deposit in your local bank, you are required to declare the income that deposit made even though your account may not be credited until the following year. It gets complicated because the information slip you get from your bank is based on the income in the year it was paid.
In my case, it gets stranger still. I had 'X' amount of dollars credited to my investment account as 'interest earned' and paid income tax on it every year for many years, even though I never had access to the account. It was to 'mature' and then be paid out. I would then pay tax on the capital gains, but will have already paid tax on the interest it earned in the meantime. Confused yet? But now the whole thing is in the tank, in receivership. I will get nothing from my original investment nor will I get the interest that was paid. This is both to the IRS and Canada Revenue Services. I will be seeing my accountant and paying him the big bucks to determine if I can get the money back that I paid on the money I never saw.
We need a tax revolt. A much simplified system is overdue. Years ago, when the Reform Party of Canada was in the political wings, waiting to form government, one of their policies was to introduce a 'flat tax'. Would somebody please resurrect this idea? I know the accountants will hurt because their work load will decrease, but the simplicity of it and the fairness of it will benefit all of us who try to earn a living.

1 comment:

Chris said...

Amen to that!!