Three-quarters of Canadians risk missing out on 2016 tax savings: CIBC Poll

CIBC's Jamie Golombek shares tips on how to reduce your 2016 tax bill

TORONTO, Nov. 2, 2016 /CNW/ - Now is the time to take advantage of certain tax-planning opportunities available only until Dec. 31, but more than three-quarters of Canadians won't even think about their taxes  until it's too late to realize the savings, a new CIBC poll CM CM finds. As well, as many as two-thirds of Canadians are in the dark about how to reduce their 2016 tax bill.  

"Too many Canadians put off thinking about their taxes until the new year, and by then it might be too late," says Jamie Golombek, Managing Director, Tax and Estate Planning, Wealth Strategies Group, CIBC. "December 31 is the quiet deadline that many may miss in the holiday rush. As we enter the final weeks of 2016, now is a particularly good time to sit down with your advisor to see what you can do to reduce your 2016 tax bill."

Key poll findings include:

• 77 per cent don't even think about their taxes until the new year, and almost half (48 per cent) wait until just before they file their return.
  
   
• 66 per cent of Canadians say they don't know of any year-end benefits or strategies that can help them reduce their taxes and save money on their 2016 tax return.
  
   
• Only 28 per cent are actually looking to take advantage of tax-planning opportunities before the December 31 deadline.

"The most effective tax planning occurs throughout the year," says Mr. Golombek. "Chances are that you're leaving money on the table if you don't know what tax credits and benefits are available to you, or if you miss the year-end deadline for some of them."

Mr. Golombek discusses various tax-planning opportunities in his new report 2016 Year End Tax Tips, now available in the Advice Centre on cibc.com.

Mr. Golombek recommends talking to an expert to ensure you're aware of changes to federal and provincial tax credits. For example, 2016 is the final year to claim certain federal  tax credits for families, children and students, including Children's Arts & Fitness Tax Credits and Education and Text Book Credits. As well, new tax credits introduced in 2016 can also provide additional savings for seniors, caregivers and teachers.

Out with the old, in with the new: Ways to reduce your tax bill

1. Pre-pay any 2017 Children's Arts & Fitness Activities before Dec. 31 to take advantage of the final year of up to $250 of expenses on artistic or cultural activities through the Children's Arts Tax Credit and up to $500 of expenses on physical activity programs through the Children's Fitness Tax Credit.
   
    
2. Renovate for home accessibility - The new Home Accessibility Tax Credit will permit a claim equal to 15 per cent of up to $10,000 for renovations to assist seniors and those eligible for the disability tax credit to be more mobile or functional in their home.
   
    
3. Stock up on school supplies – The new School Supply Tax Credit will help compensate teachers and early educators for school supply expenses they incur in the year.

"There may be things you can do now to realize tax savings when you file your 2016 return in the new year. So don't wait until the last minute. Let a professional advisor help you navigate the tax rules," says Mr. Golombek.

The poll also found that 61 per cent of Canadians received a tax refund in 2015. Moreover, half (50 per cent) agreed that getting a refund is a sign of good tax planning and only one quarter (26 per cent) disagreed, highlighting the need to seek financial expertise and advice. "Getting a tax refund isn't really a windfall, it means that you haven't been efficient in your tax planning," says Mr. Golombek.

KEY POLL FINDINGS:

Time of the year Canadians typically think about their taxes:

 

Canadians who know of any year-end tax planning opportunities that can help reduce tax burden and save money on their 2016 tax return:

 

Canadians who are looking to take advantage of year-end tax planning opportunities before the
December 31 deadline:

 

Canadians who agree with the statement: 'Getting a tax refund is a sign of good tax planning':

 

Canadians who received a refund on their 2015 tax return:

 

Poll Disclaimer
From October 11 to October 12, 2016, an online survey was conducted among 1,510 randomly selected Canadian adults who are Angus Reid Forum panelists. The margin of error—which measures sampling variability and consistency—is +/- 2.5%, 19 times out of 20. The results have been statistically weighted according to education, age, gender and region (and in Quebec, language) census data to ensure a sample representative of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.

About CIBC
CIBC is a leading Canadian-based global financial institution with 11 million personal banking and business clients. Through our three major business units - Retail and Business Banking, Wealth Management and Capital Markets - CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada with offices in the United States and around the world. Ongoing news releases and more information about CIBC can be found at www.cibc.com/ca/media-centre/ or by following on Twitter @CIBC, Facebook (www.facebook.com/CIBC) and Instagram @CIBCNow.

SOURCE Canadian Imperial Bank of Commerce