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Three Things My Tax Return Says About Me

By Kevin

Tax

Tax (Photo credit: 401K)

What can you learn from a person by reading their tax return? What secrets do they have? What can you learn about their lives… and what have they been leaving off of the return? As part of this month’s coffee talk, I’m going to give you some insight into the three things my 2010 says about me 🙂

1. I filed a single tax return.

The first thing that you’ll notice is that my tax return is a single return — no spouse, no common-law partner. Back in 2010, I had been living with my girlfriend in an apartment for nearly a year, though my name was not on that lease as I was actually replacing her friend that had been living there before. These were the days before we bought our first home together. However, by the time it was time to actually file the tax return for 2010, we were living in our new home together. So why the single return?

Is it cause we weren’t married? Actually, where we live there are “common-law marriages”, and these can take effect if two people of the opposite sex have been living together for six months or longer. Guys, girls: if you’re room-mating with the opposite sex, then you better watch out! 🙂 At the time, this sort of income splitting might have been advantageous for us, but I think we were still getting used to the idea of living together, and we were taking on one commitment at a time. Now that it is nearly time to file the 2011 tax return, I don’t know what we will do this year. I do know that she is waiting for me to put a ring on it and make it official, already. 🙂

2. I need to organize my files a little bit better.

2008 tax year… check. 2009 tax year… check. 2010 tax year… where the heck is the statement? I have been filing my returns online for many years now, and I usually keep a local copy of the final report saved as a PDF. I say usually, because when I looked into it for this year, my 2010 PDF was nowhere to be found. No problem, I can just download it from the site again, right? Nope, because they want me to pay again. I’m sure that is just a bug in the software and I have followed up with their support, but that will teach me to be lax when it comes to these sort of things.

EDIT: So I remembered that this was the first year that my girlfriend had decided to do my taxes for me (she really loves doing those sort of things, to see how much money we can save), so this is why I did not have a local copy of the final report. It was the first year I was not in complete control of my own finances in our relationship together.

3. No more refunds for me!

I used to look forward to paying my taxes because I would get a fat refund, as well as rebates for paying provincial and federal sales taxes. I got these refunds because I used to have a lot of education tax credits, as well as a lower income. Nevermind the fact that they were just returning me money that was mine; at the time it really felt like extra income. This is just one of the mental tricks that source withholding of taxes does to us — it makes us forget that it’s our money that is being returned to us.

Well, 2010 was my highest income year to date. The company I was working at was doing better then, and we had good bonus payments to go along with it. I did not breach six figures, but I wasn’t that far away from it, either. To reward me for my efforts, I was slapped with an extra tax bill, with a couple of extra thousands to pay. On top of that, I was told that I was ineligible for the sales tax rebates, since I now made too much money. 😉 It was the first time I had ever had to pay extra, and it wasn’t a good feeling! I learned a little something about the way that the world works that day.

Maybe this year will be different, now that I am out on my own and my income is decidedly lower at the moment! If some crazy entrepreneur guy wanted to see my return, he wouldn’t know anything about that — he’d only see a snapshot of the past.

Read these other great posts in this coffee talk:

Coffee Talk: Your Tax Return Diary (First Gen American)

My tax return and me (Budgeting in the Fun Stuff)

What does your Tax Return Say about you? (Dog Ate My Wallet)

My Tax Return As A Resume (Retire by 40)

Dear reader, what does your 2010 tax return say about your and your life? What have you learned, and how are things looking up (or down) for this year?

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Filed Under: Miscellaneous, Stories Tagged With: Canada, Canada Revenue Agency, Fiscal year, Internal Revenue Service, tax, Tax refund, tax returns

About Kevin

Kevin has left the office, and he is currently fighting the rat race by working on his own business. He enjoys exploring unvisited places around the world and gaining new experiences. He believes that by properly managing our energy and time, we can learn to invest our lives wisely.

Comments

  1. First Gen American says

    February 8, 2012 at 6:37 pm

    Well, I always think it’s a good thing when you’re income is so high that you aren’t eligible for deductions anymore. It means you make good money. Thanks for participating. It’s interesting how people focus on what you can’t learn about someone from their tax return. I had the totally opposite view, about how telling and personal that document really is.

    • InvestItWisely says

      February 9, 2012 at 9:11 am

      @First Gen American It was so high; remember this was a really good year for the company but they went downhill and the bonuses shrank to zero! On the other hand that was a good push for me to get out and start doing my own thing.

  2. SSmartFinance says

    February 8, 2012 at 10:49 pm

    Start making trips to attend bloggers’ conferences. And open an LLC. There you have a perfect formula to get some legitimate tax deductions. 🙂

    • InvestItWisely says

      February 9, 2012 at 9:10 am

      @SSmartFinance Haha, unfortunately no LLCs in Canada! 🙁

  3. Thirtysixmonths says

    February 9, 2012 at 1:12 am

    Education credits are AMAZING. I felt like I hit the lottery every tax season. Sadly this will be my last year that I can use them for a while.

    • InvestItWisely says

      February 9, 2012 at 8:55 am

      @Thirtysixmonths They were great while they lasted!

  4. My University Money says

    February 9, 2012 at 8:29 am

    Wow, congrats on nearing the six figures mark my friend! I would say a shrinking tax refund cheque is a nice problem to have at that point eh 😉

    • InvestItWisely says

      February 9, 2012 at 8:55 am

      @My University Money Haha, yep. That was a couple of years ago, though! The bonuses disappeared into nothing after that. 😉

  5. InvestItWisely says

    February 9, 2012 at 9:13 am

    Unfortunately, yes. Taxes act as a brake on productivity growth, savings, and investment. We always have to trade off the extra time and effort needed to build income against what we actually receive on net.

  6. MJTM says

    February 9, 2012 at 8:08 pm

    Crazy ass canucks you guys still have common law marriages? I am shocked lol

    Congrats on the increased income

    • InvestItWisely says

      February 10, 2012 at 9:58 am

      @MJTM That was a good year! Bonuses dried up afterwards. 😉 Yep, and you know what’s scary? A judge recently ruled that each partner is entitled to alimony in a common-law marriage. It used to be that only kids were entitled (which was fair). That’s why I say… watch out for those room-mates! lol.

  7. PKamp3 says

    February 10, 2012 at 11:20 am

    “It was the first time I had ever had to pay extra, and it wasn’t a good feeling!” – you mean you took out an interest free loan from the Government, collected interest, and paid it back?

    You’ve got to frame it in a positive light!

    • InvestItWisely says

      February 11, 2012 at 5:53 pm

      @PKamp3 Haha, I guess you can put it that way! 😉

Trackbacks

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