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speakup

Spring has sprung!

Now that the vernal equinox has appeared, here are some non-connected, non-prioritized bullet points of observations without the rounds.

The newspaper that you're reading asked me if there was enough for a column on the provincial budget last Tuesday afternoon. I suggested that from a personal income tax perspective there was nothing to share. However, as I chatted with the editor at the paper, I suggested that they get the budget speech and check out pages 22 and 24, since no one else seemed to be mentioning it. This was at 3 o'clock, half an hour after it was available online. My mid-day observations to the respective parties still had legs on the weekend.

Next -- while shoe boxes in the office may start to appear at this time of year, I said something that even I was in disbelief of, as it came out of my mouth -- "Put it on the shelf with the beer cooler that has the cab driver's receipts."

Point three -- like most statistical averages, deviation is usually measured in partial units. As an example, scientists estimate that the mean global temperature has changed less than one degree Celsius over the past 100 years. That being said, the average change in refund two years ago was $7. In other words, hardly noticeable. But this year? The latest stats show the average refund has increased $303 over last year. That's an average. Are you getting yours?

Lastly, and worth expanding on, people continue to wonder why the refunds are being driven up. There are two main cohorts -- parents and pensioners. Here are some caveats to consider:

Parents need to file their returns together. This allows someone the best ability to review the situation and maximize the various credits available. There are two high profile claims this year. First, every child born in 1990 or later is entitled to a $2,000 federal credit. Second, this year the new Children's Fitness Credit kicks in and it is generally worth up to $500 for kids under 16.

By preparing the returns together, parents can make sure the absolute family tax refund is maximized. A note of caution -- we have seen some returns brought into the office where one of the parents has ended up at some other establish earlier in the filing season. While the returns may have been prepared correctly, they certainly haven't been prepared to the best advantage. We have been doing adjustments in the tens of thousands of dollars collectively for the past week or two. If we didn't prepare the returns and you're not sure if you got it right, call the office. Someone will take a look at it to make sure you don't leave any money on the table.

The other big area deals with pension splitting. Married and common-law couples with retirement income can split the income for tax purposes. First, this does not mean that you need to contact the pension administrator and set something up for life. Instead you fill out a form when you file your return, and this election lasts only for the current year.

For whatever reason, we are seeing seniors in the office looking for help with this area. But we are not seeing enough of them. In virtually every case the savings are thousands of dollars, although I have saw the number as low as $500 (which is nothing to sneeze at). More importantly however, is that as we establish the trust with the new client, we ask them to bring in their prior returns for review. On Thursday I spoke with a client in one of the offices and he was ecstatic. It seems his wife usually prepares his returns and this year, when she was finished, he brought it to us to look over. The correction worked out to an additional refund on this year's return of something north of $3,000. As if that wasn't enough, he went home and retrieved the past four years of returns. A different error had consistently happened on each of those. We're currently filing adjustments for him for those periods worth -- wait for it - $2,800 plus interest. By the time it's all over, his visit to our office is going to put somewhere around $7,500 in his pocket. As I said -- ecstatic! And yes, this is a relatively common occurrence.

The Easter Weekend of my childhood use to be filled with new hard-soled shoes and bowl-a-bats. At this point in my life, I just hope we can put the shovel away before too long. Here's to spring arriving in behaviour as well as on the calendar.

n Roger Haineault is with Tax Help Inc. He can be reached by e-mail at roger@help4taxes.ca or by calling 855-HELP. His column appears Tuesdays.