Let Tax Season Work for You!

6 March 2013
Author: Teena Gill
Tax time is generally associated with anxiety, frustration, and expenses for many people; but it also means improvements on roads, public utilities, education, health care, and law enforcement. Revenue from tax helps redistribute wealth to lower income families, students, or people with disabilities. It provides social services such as Old Age Security benefits, Employment Insurance benefits, the Canada Child Tax Benefit, the Working Income Tax Benefit, and the Universal Child Care Benefit.

Filing a tax return is critical for low-income Canadians given that income tax and government benefits are inherently intertwined. Failure to complete an annual income tax return results in loss of access to essential government programs for families and individuals who would otherwise qualify. Filing an income tax return incorrectly can be just as detrimental, however there are often barriers preventing low-income people from seeking professional help. The average cost for a chartered accountant to complete a simple tax return in Edmonton is $85.00 per person.

Edmonton based charity, E4C’s Make Tax Time Pay Program (MTTP) is one organization who offers free financial services to low income families and individuals to complete their income tax return, apply for government benefits and subsidies, and gain additional information and education on related financial resources.

Without access to professional support, a family of four with a family net income of $34,000 may not be able to access the Canada Child Tax Benefit, Alberta Child Care Subsidy, Alberta Child and Adult Health Benefit, City of Edmonton Leisure Access Pass, and RESP grants and bonds they would be eligible for. Overall this family of four would supplement their earnings by 22% of their net income, as a result of filing their income tax return and applying for eligible government benefits and programs. This family could generate almost a quarter of their income throughout the year in benefit payments alone, while also saving hundreds of dollars on health care, child care, and recreation costs.

Families and individuals use the funds from their refund, plus the now accessible government support to provide food, shelter, clothing, health care and recreational activities for their families. Some federal government benefits, like the Canada Child Tax Benefit, Universal Child Care Benefit, and Goods and Services Tax Credit provide consistent income to families throughout the year. Other provincial and municipal benefits like the Alberta Child and Adult Health Benefit, Child Care Subsidy, and the Edmonton Leisure Access Pass ensure families will only pay a fraction for health, child care, and recreation expenses, if anything at all.

Taxes not only change the financial health, but also the holistic health of those who are struggling to make ends meet and provide for their families. An income tax refund may provide short-term satisfaction for low income families; however, it is the lasting impact of receiving monthly financial benefits that move families effectively out of poverty.

MTTP’s financial services are offered during the tax season each March and April, MTTP mobilizes over 300 volunteers and numerous community agencies and tax site location across the City of Edmonton. MTTP also collaborates with multi-level program partners, including the Federal, Provincial and Municipal governments to train volunteers, disseminate information, and streamline services. In addition, MTTP partners with Edmonton’s 211 (The Support Network) to arrange service user referrals from community members.

THE AUTHOR

Teena Gill is the Program Manager for E4C’s Make Tax Time Pay Program, based out of Edmonton, Alberta. Teena is also an active member of the Alberta Asset Building Collaborative and the Financial Literacy Resource sub-committee.

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