Last year was most interesting when it came to our first Canadian Tax day. Keep in mind, we still also have to file U.S. taxes even though we live here. After receiving an EMAIL from the accountant (a large firm) on Canadian tax day basically saying we owed a very large 5 figure amount (which later was found to be a bit of a mistake) and that we could pay it that day at our bank (which closes at 4 pm) or online. We're talking an amount that is difficult to pull out of your as, I mean, an amount that most people don't have hanging out in a checking account. When we called back to basically ask "WTF?" at 1 pm on TAX day, the accountant's message said "hello, this is so and so and I'm out of the office and will be returning in two weeks." You can imagine the patient Americans wondering how the heck an accountant LEAVES FOR VACATION on TAX day at 1 pm. Needless to say, we did not pay on tax day because we needed clarification.
After meeting with them to clear some things up, toward the end of the meeting we asked, "gee, what sort of things can we be doing in 2009 to reduce our tax liability for next year?"
As the two accountants looked at each other, one answered, "not much."
The rest of the conversation went somewhat like this...
US: Okay, we can't deduct our property tax, is there anything else?
THEM: You can make a home renovation and get a fraction of credit.
US: Really? We mean really (with a wink), that's it?
THEM: If you're taking care of an aging parent, have daycare expenses, medical expenses, that sort of thing, but that's it. Maybe you could start a business, but then you have to start business taxes too.
End of meeting.
You can imagine the Americans in the Canadian accountant's office. At least in the U.S. the accountant will take out a big book and start looking at rules and stuff that might work, or they make them work. NOT that we have ever done this. Interestingly, the same Canadian this morning who commented that tax day used to be more hectic, said "you Americans must fear the I.R.S. more since they will come after you." Personally, we fear Revenue Quebec and Revenue Canada more -- and it took 8 months to get our "rebate" via lots of letters, calls and created jobs to get our return figured out last year. I'm sure, many will say the same in the U.S.
That said, you can see the direction of Quebec, in general. If you have family or medical expenses, those are taken into consideration. Tax returns are easy (compared to the U.S.) which is why people are not in much of a panic. There's nothing they can do. It is what it is. You just owe. There are not a lot of loopholes and there's very little left for interpretation. However, the "tax credits" you can take are very family oriented. Here's a sample:
- Daycare costs $7/day -- this is supplemented by the government and then you can claim your out of pocket daycare on your tax form
- Disability credit -- if you have a sick or disabled child (as we do) you can take a nice "credit." However, it has to be well documented by the doctors and therapists, but it's worth the leg work.
- Child fitness credit -- for children involved in qualified sports activities we can "credit" up to $500 per child.
- Medical expenses -- anything not covered by medicare or private insurance can be eligible for a credit. Unlike in the US, you don't have to reach a certain dollar amount to qualify. Also milage to and from appointments and therapies is covered.
- Credits for taking public transportation
Unlike the U.S., everything has to be very well documented -- very well documented -- before you send in your returns, not just when/if you get audited. You can't have your sister's sister-in-law's cousin be your child's speech therapist unless they have the qualifications and provide you with the receipt. Same with the home renovation credit we were able to take this year. It stimulates the economy, yet only if you use people who also pay their taxes.
All in all, Canadians tolerate taxes. Yes, they do complain. We won't ever complain about taxes in the U.S., regardless of the bullshi fear that dudes like Rush Limbaugh spew daily. The U.S. has it made...even with a democrat in office. Seriously, unless you have lived in another part of the world, it's hard to comprehend. Legal or illegal immigrants aside (that's an entirely new blog post), there's a reason why people want to move to the U.S.
However, most everyone in Quebec has benefited from the high taxes, whether through "free" medical care, a year-long partially paid maternity leave, a nice paternity leave, paid leave to care for an aging parent, a paid three week respite for stress in general, subsidized daycare or affordable college (in Quebec), to name a few. You won't find Tea Party-types in Quebec like you will in the U.S. However, we have found that cash works. Things are always negotiable with cash regardless of where you live.
Note to self: check and see of the Montreal Canadien hockey tickets qualify for a tax credit. It's possible. The cable bill to watch the Canadiens? Even if we watch it in French?