The Grumpy Accountant – GIVEAWAY

Back in later 2020 I received an email from an author, Neal Winokur, describing his new book “The Grumpy Accountant: One Fed-Up Tax Pro’s Practical Plan To Fix Canada’s Senselessly Complicated Tax System” and asked if I’d be interested in a copy.  I don’t think Neal realized the book worm that I am and was impressed in how fast I read it after getting my hands on it 😉

Not only does the book include 29 practical tax tips to help you save time and money, but it also provides a very clear and reasonable way to clean up our tax system in a easy to comprehend manner.  Don’t get me wrong, I hate everything that has to do with tax season.  It both confuses me and brings a lot of anxiety.  So originally, the idea of reading a book about taxes came off as a bit worrisome and I thought it could only be dull with a capital D.  However, Neal clearly explains the Canadian tax system, comes up with a solution to many of its issues, and manages to do this in a funny way.  Yes.  It honestly reads just like The Wealthy Barber which is more of a story format with characters and a plot and gasp – humor.  And if there are any Seinfeld fans out, it’s clear that Neal is one too and drops many Seinfeld references throughout the book.

I was quite impressed with Neal’s book that I invited him to come on to our blog to provide a guest post about this topic AND Neal has graciously agreed to give away two books to two lucky winners.  Check out the giveaway details at the bottom of the post to learn how you can win your free copy.

Note that this post is not paid for in any way.  After reading Neal’s book, I wanted to use my platform to allow him to reach others who may be interested in this topic.  We only promote products/services we personally use and feel are truly beneficial.  And Neal has graciously agreed to give away even more copies of his new book on his own dime.

Without further ado, take it away Neal!

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What’s the deal with filing a tax return every year!?

Neal Winokur, CPA, CA

Why does the job of a “tax accountant” exist? Why does every individual in the country need to file a tax return every year? Why is it that filing a tax return is so complicated, people need professional help to undergo this nightmarish task every year?

These questions kept nagging me to the point where I realized my job should not really exist. Think about it.

Let’s say you are an employee who receives a T4 slip. The government obligates you to take that T4 slip, record it on your T1 individual income tax return in order to report the income to the government. The income taxes payable has already been deducted from each pay cheque and is indicated as such in Box 22 of the T4 slip.

So why, oh why, I ask you do we need to file a tax return? When your employer issues you your T4 slip, they also file it to the government. The government already has the T4 slip! But you need to send it to them again! Why???

Well, you see, politicians, in their infinite wisdom, greatness, and generosity have inserted all sorts of tax deductions and credits into the tax return. If you are eligible to claim these, you can lower your tax bill and claim a “refund” of the income tax that was deducted from your pay cheques.

There are over 120 tax credits and deductions you may be eligible for.

Why do we need tax credits and deductions?

Politicians LOVE tax credits and deductions because they can use them to target specific groups of voters at election time. Both major political parties are guilty of this offense. The Conservative Party under the leadership of Stephen Harper created a whole slew of tax credits. They added the child fitness tax credit, the child arts tax credit, the public transit tax credit, the home renovation tax credit, the family tax cut (income-splitting), and more. The Liberals under the leadership of Justin Trudeau eliminated these credits but then created their own tax credits, such as the teachers school supplies tax credit, the climate action incentive, the lifelong learning plan, and others.

Another reason why politicians love tax credits and deductions is because it helps them to achieve their policy objectives from a social and economic perspective.

Allow me to share with you the following true story.

I wrote an article a few years ago calling for the elimination of ALL tax credits and deductions. I gave the example of the child fitness and child arts tax credits and claimed they were “silly”. After all, if the government wants to lower our tax bills, why not just lower the tax rate? This would be simpler, apply to everyone, and no one would need to do anything to claim the reduction.

After that article was published, I received a phone call from someone who introduced herself as a policy advisor to Stephen Harper who claimed that the child fitness and arts tax credits were her idea! She said they really, genuinely, wanted to encourage parents to enroll their children in fitness and arts programs because they encourage better health outcomes, both physically and mentally. She resented that I claimed the tax credits were “silly”.

I chatted with her for quite a while and I truly appreciated her reaching out to me. But I explained my position honestly. I said, “Look, if the government wants to encourage parents to enroll their children in fitness programs, that’s great. I have a daughter and of course I want her to be physically active. But do we really need a tax credit for this? Is it really the job of the federal government, of bureaucrats, policy makers, academics and politicians to micro-manage our lives? Don’t they trust us, as adults to be able to make decisions that will better our lives without a tax credit? After all, why not an adult fitness tax credit for gym memberships? Don’t we want adults to exercise and be healthy too? Where does it end? How about a tax credit for those who purchase fruits and vegetables?”

The problem with these tax credits and deductions are many.

Firstly, you have to know which ones exist for which years. I would actually recommend everyone go to a tax professional and review your past 10 years of tax returns that you filed. The credits and deductions constantly change and it’s very possible you may have missed something. You can file T1 adjustments, online in your CRA My Account, for the past 10 tax years to claim deductions and credits you may have missed.

Secondly, the deductions and credits force people to keep receipts and documents to prove these credits and deductions for the past six tax years! What kind of a country are we living in where citizens are forced to act as record-keeping bureaucrats!? These deductions and credits also cause people to spend much more time and money in actually preparing and filing their tax returns. In the country of Estonia, where the tax system is much simpler, it takes the average resident only five minutes to file their tax return!

Thirdly, the deductions and credits force the Canada Revenue Agency (CRA) to hire, literally, thousands of employees to assess, review and audit our tax returns. The CRA has over 44,000 employees, making it one of the top 10 employers in Canada! The CRA’s budget is nearly $5 billion per year and growing. Whole departments exist just for T1 individual tax return processing and reviews.

Lastly, taxpayers are driven through hoops in order to file their tax returns, spend time waiting for their tax refunds, have to deal with CRA audits and reviews of their tax returns, re-assessments, objections, appeals and court cases. Often times there is a lack of clarity in these deductions and credits, people make honest mistakes, and then are penalized with monetary penalties and interest.

So, where do we go from here?

Well, in order to comply with the current system and ensure you are maximizing your tax refund as much as possible, which you are fully entitled to, you must be up to date and knowledgeable when you prepare your tax return each year. You may be missing out on any number of deductions or credits that you can claim. As one example, someone who has Type 1 Diabetes will, typically, be eligible for the Disability Tax Credit. Many people are unaware of that. So, I would recommend seeking out a tax professional to review your situation.

Secondly, set up your online CRA My Account. Go to Google, type in “CRA My Account”, the link will show up, and follow the steps to set it up. This will allow you to access your past 10 years of assessments, re-assessments, see your RRSP and TFSA contribution room (although they are sometimes not accurate or up to date), access all your tax slips for the past 10 years, and much more.

Thirdly, keep ALL your receipts, bills, invoices, backup documentation for at least six past tax years for every deduction and credit that you claim. You are permitted to keep scanned copies, as long as they are legible.

Fourthly, join me in a new movement to simplify Canada’s tax system. I wrote a book, The Grumpy Accountant, about how horribly complicated our system is, along with my ideas on how to massively simplify it, in a non-partisan apolitical fashion once and for all. For example, I show how we can abolish all the tax credits and deductions in the system and then simply lower the tax rates to make up the difference.  This would eliminate the need for tax return filing, tax professionals, tax courts, thousands of CRA employees, keeping receipts for six years, waiting for tax refunds, and more.

It is truly shameful that my job, the tax accountant, even exists! Many other countries have MUCH simpler tax systems in which the majority of taxpayers (employees) don’t even have to file a tax return each year! Canada should be looking to the best practices of those countries and engaging in a total comprehensive review of our tax system to save us all the burden, headaches, pain and suffering that we have to undergo each year.

Neal Winokur is a CPA. His new book, The Grumpy Accountant is available for sale on Amazon.ca. To reach out to Neal, visit www.grumpyaccountant.ca.

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Thank you so much Neal for taking the time to come on and write this!  I hope you can tell how passionate Neal is about trying to fix/ease the current tax system and I hope this short guest post got you interested in learning more.  The revamping to the current system Neal provides in his book really is an “ah-ha… duh..!” moment in which the solution is so simple yet like Neal mentions above, politicians likely would not go for it as the simple solution eliminates the need for many of the credits which they push to win over votes.

You can learn more about Neal and his book here.

In order to qualify for the book giveaway, all you have to do is comment below!  It can be about anything really.  Simply stating you’re interested in the book is more than fine.  Or sharing your thoughts on Neal’s guest post above.  Or coming up with a suggestion of how you think the tax system should look like.  Or sharing a story of why taxes makes you grumpy too.  You get the idea 🙂 We will announce the winner at the end of the month and put you in touch with Neal so he can send you a free copy of his new book.  Make sure you enter in a valid email address when you put in a comment as I will be emailing the winners.  Note this book is focused on the Canadian tax system, so please only enter to draw if you have a Canadian mailing address.

If you have any questions for Neal, please write a comment below where he can respond and provide any follow-up resources that he has available.

Thanks for reading and for those who do not win, go get a copy of the book to improve your tax acumen and see how Neal is able to simplify the tax system.  Neal for Minister of Finance!

And lastly, please send us a note if you’d like to take place in our Social Media Detox Team Challenge which will be taking place in April (with emails starting to come out very shortly as we prep for April).  You can doooooo itttttttt!

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