Owing Taxes?!?!

As I was entering the last few tax forms that are coming in (invest income is good, but waiting for the tax forms takes forever) into QuickTax I’m finding myself looking at an unfamiliar sight.  I owe taxes?!?!

You have to realize that I’m used to my wife owing a little bit of CPP each year, but I’m in a bit of a surprise that I personally own anything.  I’ve been on refunds for such a long time that I’m having some difficultly adjusting, since I usually leave a bit of cushion on my tax planning to make sure I have a small refund.  Yet in hindsight this isn’t surprising at all for a few reasons.

  1. Second Job – It’s just about impossible when taking a second job to have the right amount of tax coming off at the start, unless you are very good at calculating the tax implications of that additional income.  I’m not that good, I always seem to be off a bit.
  2. Selling some stocks – Upon opening our TFSA’s in 2009 we sold off some stocks in our taxable accounts which triggered capital gains/losses.
  3. Home Buyers Plan – When I did my tax planning I messed up a little bit and forgot about my home buyers plan repayment, which is about $700.

All in all it’s not much that I owe, about $300 right now.  So from a tax planning side I did fairly well, I’m just off a little bit from owing/refund goal of $0.  A reminder the deadline to file is April 30 in Canada.

So how did you do on your taxes this year?  Are you having  a refund or do you owe?

9 thoughts on “Owing Taxes?!?!”

  1. Although most people enjoy getting a tax refund, it’s not a good thing. Not only is your government taxing you at a high rate on earned income, but you’ve also overpayed. Each person can decide for themselves whether or not our government provides value for money, but the fact that our taxes are withheld before we receive a paycheck generally lulls us into not thinking about it.

    Having said that, I feel very little outrage because I pay very little tax. Between business expenses, interest on investment loans, RRSP contributions, flow-through shares, charitable donations and having children, I just don’t owe very much. And I’m happy to have a tax bill in April, rather than pay quarterly installments. I just need to make sure the cash is available.

  2. My refund was $.07 and that’s fine by me.
    I’d rather have my money working for me all year long rather then the Government keeping there grubby paws on it.

    I was told by the CRA that any amount up to $2.00 is neither owed or refunded. My goal next year is to owe the Government $1.99.

  3. I almost always owe at tax time because I have unearned income (since 1990) which had no taxes withheld, whether I was working or not. And any estimated tax payments I make at the end of the year are enough to avoid underpayment penalties but little more.

    One thing I did starting in the 1990s when I was working was to have a different W-4 exemption amount for my state withholding (a special state version of the W-4 form) versus my federal. This enabled me to adjust each separately.

  4. @addicted2dividends,

    HA! I love that idea. I should try for owing $1.99 too next year.


  5. I got the “owe” shock this year for the first time too. Much nicer feeling to get refunds.

    Although the reasoner in me says it’s a good thing, because I got an interest-free loan!

  6. Unfortunately I have sent in my cheque for over $3,000. I am not complaining though as I was able to use that money all year.

    My business income brought this on. I have may adjustments at my employer so I will not be in this position next year.

  7. I received a little over $10,000 this year. I agree that letting the gov’t have your money all year is at least unpleasant. But how do I get around waiting to use the tution deduction (2 at university) and I still need to contribute to an RSP, no pension here.

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