Dateline: 1/5/98

After a week's hiatus it's good to be back again. I hope you all had a happy holiday season and are set for a prosperous new year. With the new year the deadline is fast approaching for people to save themselves some money on income tax by contributing to an RRSP. So this week's article takes us on a tour of resources on the Internet to help Canadians get a handle on their taxes.

Tax Resources on the Internet

In his 1998 RRSP Guide, Garth Turner says "most people who prepare their own income tax returns are either cheap or delusional". He should know. He was Canada's Minister of National Revenue (the big kahuna, the numero uno taxman) for a number of years. If even he finds the income tax system too complicated to do his own return, what about us poor shmucks out here?

In fact, I have done my own tax return since I first started paying income tax. I don't know whether that makes me cheap or delusional, but when all I had was my T-4 slip to declare, it seemed pretty straight forward. For many people that is the case. Last year it started getting tougher. Not only did my wife and I buy a small business, I also invested in an oil and gas limited partnership as a tax shelter and I used leveraging in investments outside my RRSP. Completing the form was tough (but educational). This year I'll use a consultant to file for me.

But whether you file your own return or have a professional do it for you, it is worth understanding the income tax system and how it works. It helps you plan and helps you avoid costly mistakes in the future. To that end, let me take you on a tour of the Internet searching for tax information for Canadians. (All of the resources cited here are tabulated at the end of the article for easy reference as well as being listed in a new category called Aaargh! Taxes! in my library of Net Links).

Government

The main source of authoritative information is Revenue Canada itself. Here you will find a wide range of general information as well as an FAQ page and links to download many of the frequently requested publications including the Capital Gains Tax Guide. You can also find most of the forms you may need. You don't have to go trucking to the nearest Revenue Canada office and wait in an interminable line anymore nor wait for Canada (Slow) Pokes to deliver it!

A site called Info Entrepreneurs tells you how you can get information from the Income Tax Rulings & Interpretations Directorate. Or you can go to Quicklaw to look at recent court decisions and a list of what's available on their various databases including their Quicktax service. You need a password to access the full database.

Accountants & Tax Consultants

Then there are the accounting firms and tax consultants. KPMG has an extensive site relating to taxes. Features include a Tax Tip of the Day, Tax Facts & Figures and their monthly Canadian Tax Letter with issues going all the way back to February 1994.

At the Ernst and Young Tax Centre you'll also find a vast array of material. Their E&Y Tax Mailbag is a weekly newsletter similar to KPMG's newsletter. However, many of the topics covered are in response to questions emailed to them. Got a question? Send it along! They may just cover the topic. They also have RRSP Calculators that will tell you how much tax you will save with your RRSP contribution, analyses of various government budgets and an extensive collection of publications.

E&Y also hosts the Virtual Tax Resource Centre, a subscription service that provides up to the minute news on taxation but also has an extensive library of free material.

Another major accounting firm is BDO Dunwoody. They also have government budget analyses, their own tax bulletins and their quarterly publication The Tax Factor. While useful, the BDO Dunwoody site is not nearly as extensive as the Ernst & Young or KPMG sites.

The Deloitte & Touche site features their bi-monthly newsletter Tax Breaks, plus some tax facts and some specialized newsletters. Again, not in the same league as the KPMG or Ernst & Young sites.

H&R Block is a well known international firm that does tax consulting. Their site, however, is entirely geared to the U.S.. Although there is a Canadian flag prominently displayed, it is not a link. Also their Office Locator Search Engine comes up with no Canadian locations (at least for the provinces I checked - Alberta, B.C., Ontario & Quebec) although the Yellow Pages phone directory shows several offices in Vancouver. I'll be charitable and assume their site is still under construction.

Those are the majors, but you'll find plenty of advice from lesser known accountants and consultants as well. Check out the table at the end of this article for more. And for a great quote about accountants check out my Quote of the Week!

Software

Tax software has become increasingly popular over the years. You can find the major packages at your computer store but you may want to check them out on the Internet first. Check out Intuit's Quick Tax site for tax tips and a download of their Quick Tax Headstart program. No free demo though. You have to pay for it online.

CanTax is another popular commercial tax software package. The CanTax site has downloadable demos and a discussion forum as well as technical support and patches for their customers.

Taxprep touts itself as the software for tax professionals. The site includes their Taxprep Times newsletter but no demos.

You can get a fully functional shareware program from TaxWiz. I downloaded it and it looks good. It provides a complete tax form on your computer. You just fill in the blanks and it does all the calculations. No need to worry about math errors or, if you're like me, going back and changing things many times and having a finished form that's covered with chicken scratch!. The site also features an interactive tax calculator so you can get a quick rough estimate of your tax liability.

Books

Two books stand out as the bibles of the tax preparation industry. They are Carswell's Canada Tax Manual and CCH Canadian's guide. Both are very expensive. CCH also has specialized books on narrower topics of taxation as well as software. You probably won't want to buy one unless you are in the business, but you can check out their websites for information on these books.

Education

If you're interested in taking a home study course on tax preparing, be sure to check out the Jacks Institute. Evelyn Jacks is well known for her many books on tax preparation, all of which are described and can be ordered from the site.

RRSPs

The RRSP is a huge topic in itself, so next week I'll cover RRSPs in depth. Meanwhile you may want to check out Garth Turner's 1998 RRSP Guide online. It's not just a preview. The complete text of the book is online. I just bought Turner's book and will review it and other RRSP guides in a future article.

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