# Big Income Tax Refunds



## Sasquatch (Jan 28, 2012)

Seems like the common consensus at Income Tax time is that the higher the refund, the happier the recipient.
Am I the only one that thinks it's a rather skewed way of looking at it?
I just did our income taxes and between my wife and I we owe the CRA almost $ 4500.-
I have to admit that it hurts a little to have to pay a large amount like this every year and it is tempting to increase our "at source" deductions to reduce it. 
However, at the end of the day I think it's the right way to do it rather than lending the CRA my hard earned money interest free for a whole year just to get a big refund at the end.
I am able to "income split" our pensions in such a way that neither one of us owes more than $ 3000.- at which point the CRA would want to be paid in quarterly installments.
Just wondering if there's anybody else out there who has similar thoughts on this subject.


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## rikk (May 28, 2012)

^ Settling up with the CRA by electronic payment tomorrow ... ~$9600 outstanding. Assessment says next year the CRA will be asking for (demanding) installments as you've posted ... my initial reaction, what's up with that, isn't 30 April the due day (without penalty) ??? But then, what can you do ... but geez, I'm paying them 7 days ahead of the 30th, what's the frikken problem :listening_headphone


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## pwm (Jan 19, 2012)

I too do not believe in giving CRA an interest free loan. I'm retired and I paid a total of ~ $20,000 income tax in 2014 for both my wife and me. The reason for that is that the only tax deducted at source is my company pension and RRIF withdrawal. I would have to allocate all my CPP and OAS to CRA directly to be tax neutral in April. I would rather have the money in hand and pay installments. It amounts to the same thing in the end, but I guess I prefer to think I'm getting CPP and OAS even though I pay that money back each quarter and then make another payment in April. It gives me the false illusion of getting my government benefits I guess.


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## CalgaryPotato (Mar 7, 2015)

I've typically gotten a couple of grand back, which to me I'd prefer being on that side, even though it's technically a loan, rather than having to make an effort to keep money aside during the year to pay them at the end.

However this year, I'm getting 10K back, my wife is ecstatic, I'm a little bummed that's getting to be a big loan to the government.


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## Cal (Jun 17, 2009)

Totally agree Sasq....never did understand why people are so happy to get their money back that shouldn't have been taken in the first place. It is their money after all. They should be pissed that it was taken in the first place.


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## gibor365 (Apr 1, 2011)

CalgaryPotato said:


> However this year, I'm getting 10K back, my wife is ecstatic, I'm a little bummed that's getting to be a big loan to the government.


Same with us....just below 10K .... big bump comparing to last years probably because os income split ($2000) and transfering our son University tuitions


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## lightcycle (Mar 24, 2012)

I agree with you. Better to manage your tax situation so you're slightly underpaying than getting the loan you gave to CRA all year long paid back with 0% interest in May.

I always viewed those who were happy they got a large refund as not being able to save by themselves that they were happy the government had a "forced savings" plan in effect... after which they happily blew their refund cheque anyway on a new TV, etc. *shrug*

I don't mind owing money at the end of the year. I'm on top of my income and gains, so I know how much to put away to make the taxman happy in April.


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## OhGreatGuru (May 24, 2009)

rikk said:


> ^ Settling up with the CRA by electronic payment tomorrow ... ~$9600 outstanding. Assessment says next year the CRA will be asking for (demanding) installments as you've posted ... my initial reaction, what's up with that, isn't 30 April the due day (without penalty) ??? But then, what can you do ... but geez, I'm paying them 7 days ahead of the 30th, what's the frikken problem ...


What is your frikken problem? This is not a penalty. Taxpayers who owe more than $3K are expected to start paying taxes by installments for their next year's income. The $9600 you had to pay was on 2014 income. According to your theory, no one should have to pay any income taxes until April 30 of the following year. What is the government supposed to do for revenue in the meantime?


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## 6811 (Jan 1, 2013)

Totally agree with Sasquatch, Lightcycle, Cal and others and have been trying the last couple of years since retiring to not give the government(s) a free loan. 
Last year's (2014) return netted me about a $4,300 refund from the two levels of gov't but $2,500 of that was a a special limited time home improvement rebate from Revenue Quebec that I managed to catch. Still, I'd like to get it as near zero as I can this fiscal.


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## rikk (May 28, 2012)

OhGreatGuru said:


> What is your frikken problem? This is not a penalty. Taxpayers who owe more than $3K are expected to start paying taxes by installments for their next year's income. The $9600 you had to pay was on 2014 income. According to your theory, no one should have to pay any income taxes until April 30 of the following year. What is the government supposed to do for revenue in the meantime?


OT: You left out the smiley face in my post ... no worries, I'm ok with the instalments, been doing it all my working life, I pay my debts and on time, blah blah blah. But since you asked, the federal, provincial governments could have practiced some discipline (e.g., have senators live within their means), and made do with that $13.6K already paid ... way ahead of the 30 April deadline :cheerful:


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## indexxx (Oct 31, 2011)

I don't mind getting a bit of a refund- it's a nice way to add an extra lump to my TFSA once a year.


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## Userkare (Nov 17, 2014)

6811 said:


> Totally agree with Sasquatch, Lightcycle, Cal and others and have been trying the last couple of years since retiring to not give the government(s) a free loan.


This past year I didn't have a choice. Even though I informed my employer that I was retiring in the 1st quarter of 2014, they would not adjust my tax deduction appropriately; they deducted tax as though I would be earning the whole year. I calculated that I would get back a good chunk of cash, then also made just enough of an RRSP contribution to put me into the minimum 20% ( ONT ) bracket, and got an even bigger refund. 

I don't mind lending our government money; but it would be nice if, since they force us to pay installments in advance, they gave us interest on the excess money they held. They sure as heck charge interest if you end up owing them money!


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