Whew, finally finished 2011 tax! I was also encumbered by some confusing details with my deceased Aunt’s tax (I am her executor). No way am I actually doing it myself; she was a joint US-Canadian resident, and will be filing six returns altogether (herself + the estate, in each of Canada, the US, and Illinois). But I still spent a ton of time tracking down information for the CA who is doing it.

One thing I realize: we (taxpayers) are almost completely at the mercy of providers like Broadridge to generate accurate T-slips. Oh, sure, if you don’t have significant investments, verifying your T4 and maybe one for your savings account is no biggie. But consider:

1. My T5 from IB was for around 100 separate dividend payments and they provide no way to reconcile it (eg. their system, unlike ours, doesn’t give you an ‘Income Summary’).

2. My Aunt received 1099’s (like a T5) from a pension in the US that bore no discernible correlation to what went into her bank account. To verify it, I would need to get a list of individual payments, PLUS get the TD bank to lookup the FX rate they applied to every one. No way Jose.

3. Worst of all, I have a managed account at Nesbitt that had a 15 page STTS (that’s the list of trades hey did). It’s not a big account but they generate tons of activity. To make matters much worse, sometimes securities (hedge funds and so forth) have ROC’s that go back years, and they can be very material. You need to track them all down and add them up, OR, trust that Nesbitt did it right. Which is the only realistic alternative.

I am conflicted by tax. On hand #1, I appreciate living in an awesome country like Canada and I have no problem paying relatively high tax to live here. It pisses me off when people misquote our tax rates to imply that income tax alone is 50%+ (that may be the marginal rate but the overall rate is certainly not that!). I am in a high tax bracket and paid just under 16% overall, including BC tax. I have nothing in the way of tricky tax schemes other than my RRSP which I almost always max out.

Yes that doesn’t include HST, property tax, fuel tax etc. but if you want to go there, you’d have to get into the value of free medical and non-taxable profits on your principal residence and … and … and …

On hand #2, I hate that some portion of it goes to the likes of the BCTF (who, based on the letters in the Sun last week, seem to have finally lost their mastery of PR, that is, the tide really seems to have turned against them).

On hand #3, part of me thinks all the little forms and boxes and rules are kind of interesting. On hand #4, I would way rather be practicing drums!


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