Expensive To Comply With Tax Department

The estimated cost of complying with the multitude of tax regulations for the average taxpayer, along with the sweat and tears expended when taxpayers are pulling together the required papers to complete the return and meeting with tax professionals is a whopping $4 to $5.8 billion cost per year. That's $215 for every tax filer ñ more than $300 for businesses.

It translates into 5 hours of tax prep time; seven hours counting tax planning and appealing decisions made by CRA, this according to a recent study by the Fraser Institute, The Cost to Canadians of Complying with Personal Income Taxes by Francois Vaillancourt.

Some highlights from the study follow:

• 51 percent of Canadians filing taxes pay for professional assistance (versus only 39% in 1986)
• 31 percent of tax filers are involved in preparing their own returns
• 18 percent of the filers use friends, family or non-profit organizations for help
• Men are more likely to prepare their own returns than women
• Paid tax preparers are used at a significantly higher rate when taxable income is over $100,000

For more information on tax planning provisions and compliance requirements subscribe to The Knowledge Bureau's online tax reference for taxpayers, financial advisors and their clients: EverGreen Explanatory Notes.