For people who like to optimize and are expecting an income tax refund, we are now into income tax filing season. For those who will have to pay more, tax filing season won’t come until the end of April for Canadians and April 15th for Americans.
Ordinarily I prepare my taxes a little at a time until I finally receive the last slip I need and then e-file my return to get the refund as soon as possible. This year I decided to see how long it would take to complete the full task of filing my taxes. So, I didn’t do any advance work beyond storing slips and receipts in appropriate folders.
One day when I was satisfied that I had all the required information, I started working on the taxes for myself and my wife at 1:00 pm. This began with buying a copy of QuickTax online and installing it. My reason for using QuickTax is mostly momentum. I know how to use it, and haven’t seriously tried other options.
It’s amazing how some tasks always seem to take longer than they should. I didn’t complete our personal returns and e-file them until about 5:15 pm. Then I worked on my GST return for business income and drove to the bank to pay a small amount of GST owing. I got back at 7:00 pm which meant that the whole task took 6 hours.
Our returns are quite simple, and I can’t really justify why it took 6 hours, but it did. If we make the sweeping assumption that 6 hours is typical for roughly 10 million individuals or couples filing taxes in Canada, the total time devoted to filing taxes is about 7000 years, or nearly 100 lifetimes. I suppose the real figure could be anywhere from 10 to 1000 lifetimes, but no matter how you calculate it, that is a lot of time lost each year to our income tax system.
Remember that you have an understanding of the tax laws that would put you near an expert (certainly for issues that affect you) and that sped up the whole process too.
ReplyDeleteThink of the amount of time spent learning the tax laws too?
And that's the reason why income tax should be abolished and a sensible substitute be used in its place.
ReplyDeleteSales tax with rebates for low income people?
Mark
Big Cajun Man: I've certainly spent a fair bit of time trying to understand tax laws, but I think it pays off for me mostly in decision making to minimize taxes. When it comes to actually filing my taxes, I may be fairly quick, but it still takes time.
ReplyDeleteMark: Simplifying our tax system would certainly pay off in reduced waste of time. A staggering amount of time goes into accounting for tax purposes. This includes issuing receipts, tracking mileage on cars used partially for business purposes, tracking medical expenses, and dozens of other categories of tracking numbers that don't have to be tracked for any reason other than income taxes. We can't get rid of all of this, but simplifying the tax system could eliminate most of this wasted time and effort.