When it really comes down to it we know that our tax dollars or at least a small portion of them are used to benefit us. It isn’t that we mind so much putting our hard earned money into the tax coffers, it’s the way that they are utilized that really gets to us.
If you ever wanted to have the perfect tax dream perhaps it would go something like this….
To start with you would only pay taxes after your living costs were deducted and not before. If that were to be, what would the tax situation be like?
Let’s say you are a family of four and live modestly but are quite happy except for the shortage of money that you experience. Your living costs would roughly equate to something like this….
House renting $18,000 (1,500 per month)
Utilities 6,000
Food 18.000
Clothing 4,800
Car 6,000 (paid mo.)
Gas-rep 4,800
Entert.kids 3,600
Fam.vac. 3,000
Ins.misc.exp 3,600
Your total yearly cost of living and exp. would add up to about $67,800. So this would mean that if one person was working in the family for $15. Per hr. at a 40 hr. work week they would bring home $31,200 for the year. That’s without any deduction like taxes being taken from it. Oh, and by the way, currently the minimum wage is $10.25 but possibly going up to $11.
So no doubt both you and your spouse would have to work full time to even be close to a lifestyle such as this, and that would be without paying taxes.
Although this paints a pretty bleak picture, instead of letting it get you down, use it as an incentive to meet your tax obligation by being tax smart at taking advantage of all of your potential tax credits and incentives, then add some creative yet legal tax planning to this and you will be quite proud of your accomplishments. Strive towards something that will put you into a position where you can earn more than what you have to spend, even with your tax obligations. Then slowly you turn the picture around. Be sure to call Sam Seidman here at Toronto Accountant to help you get back what taxes you are eligible for and some tax planning as well.
