Many using tax refunds to better financial position: CPA Canada survey
TORONTO, June 5, 2013 /CNW/ - Debt reduction was cited as the leading use of tax refunds among respondents participating in a national survey conducted for the Chartered Professional Accountants of Canada (CPA Canada).
Forty-four per cent of the more than one-thousand individuals surveyed indicated they received a refund after filing their taxes for 2012. The survey, conducted in early May, asked participants receiving money how they would use the largest portion of their tax refund.
Twenty-eight per cent of those receiving a refund said it would be used to pay down debt. The next two most popular uses were putting it into savings or investments and using it for day-to-day expenses, both cited by 18 per cent of respondents.
"It is very encouraging to see a significant number of individuals choosing to better their financial position by paying down debt or building their savings," said Nicholas Cheung, a director with CPA Canada. "However, we do recognize that some Canadians will have more options than others because of individual circumstances."
Other tax refund uses referenced by respondents included using it for home improvement/renovation (12 per cent), a vacation (seven per cent), a child's education (five per cent), a treat by spending it on entertainment, a meal, personal care, clothing or other non-essential purchases (four per cent) and putting it toward a large purchase such as a television or automobile (two per cent).
When asked if they normally plan in advance on how they will use their refund, 46 per cent of respondents agreed while 38 per cent disagreed. Eighty-eight per cent of respondents said they keep their tax receipts organized throughout the year so they are ready when the time comes to file a tax return.
Money worries also continue for Canadians. When asked if they worry about money, 52 per cent of respondents agreed with the statement while 39 per cent disagreed. Fifty per cent of respondents were worried about money in an earlier survey conducted in late 2012 (www.cica.ca/2013financialpriorities).
"Lingering money concerns are not surprising since economic uncertainty continues," said Cheung. "It makes sense that a number of individuals would look to strengthen their financial situation with money received through a tax refund."
Debt reduction also was prominent in the earlier survey in which 65 per cent of the respondents called it a high or moderate priority for 2013. "Clearly, reducing personal debt is on the minds of many individuals and tax refunds are being utilized to help achieve that goal," noted Cheung.
CPA Canada conducts research to take the pulse of Canadians on issues relating to financial literacy.
The organization produces practical publications to help Canadians deal with money management, conducts research, oversees an outreach initiative with member volunteers delivering seminars in their respective communities and maintains a website dedicated to financial literacy (www.financialdecisionsmatter.com).
The 2013 CPA Canada Tax Refund Spending Survey was conducted by Harris/Decima via telephone between May 2-6, 2013, with a national random sample of 1,006 adult Canadians aged 18 years and over and is considered accurate to within ± 3.1 per cent, 19 times out of 20. A survey summary report is available online at www.cica.ca/taxrefunds.
About CPA Canada
CPA Canada is the national organization representing the Chartered Professional Accountant (CPA) profession in Canada. The Canadian Institute of Chartered Accountants (CICA) and The Society of Management Accountants of Canada (CMA Canada) created the organization on January 1, 2013, to support unification of the Canadian accounting profession under the CPA banner. CPA Canada is responsible for providing services to CAs and CMAs on behalf of CICA and CMA Canada as well as to CPAs and CGAs participating in the unification effort. CPAs will serve the public interest across all sectors of the economy with integrity, sound ethical practices, disciplined regulation and proven strategic management and financial expertise. Accounting bodies representing almost 90 per cent of Canada's professional accountants are committed to unification or have already merged under the CPA banner.
SOURCE CPA Canada