CIBC tax quiz finds knowledge gaps, but can you score 100%?

The deadline for filing personal income tax returns is fast approaching but many Canadians are likely to make errors.

Often that’s because of simple misconceptions about what they can and cannot claim as tax deductions, and what constitutes taxable income in the eyes of the Canada Revenue Agency.

CIBC decided to put more than 1500 Canadian adults to the test by asking them 10 ‘true or false’ questions about taxes such as whether lottery winnings are taxable income and whether laser eye surgery is an eligible medical expense.

Just 19% managed to get 8 or more correct although 4 in 10 people managed to get 7.

"Having a good understanding of personal income tax is critical not only for filing your return accurately, but the more tax knowledge people have, the better they can take advantage of applicable tax deductions and credits which can, in some cases, lead to savings," said Jamie Golombek, Managing Director, Tax and Estate Planning, CIBC.

Take the test

As a wealth professional, you’ll sail through these, but who doesn’t enjoy a tax quiz?!

The answers and the share of those tested who got each answer correct are at the end:

1. Withdrawing from a registered retirement savings plan (RRSP), other than to study or purchase a first home, is taxable.
2. Lottery winnings are considered taxable income.
3. Receipts and records need to be kept for 6 years for tax purposes.
4. Laser eye surgery is an eligible medical expense.
5. Moving expenses may be a valid tax deduction if you moved for work or school.
6. Selling a personal item valued under $1,000, online, is a taxable transaction.
7. It is possible to make an adjustment to your tax return after filing.
8. You are responsible if your spouse doesn't file their taxes.
9. You can give your child a tax-free gift of any amount.
10. An inheritance received by a Canadian resident is tax-free.

"There are many Canadians who could do with a tax refresher," added Mr. Golombek. "There is still some confusion around subjects such as inheritances, gifting, and spousal responsibility."

Answers:

1. Withdrawing from a registered retirement savings plan (RRSP), other than to study or purchase a first home, is taxable. (True, 85% correct)
2. Lottery winnings are considered taxable income. (False, 68% correct)
3. Receipts and records need to be kept for 6 years for tax purposes. (True, 83% correct)
4. Laser eye surgery is an eligible medical expense. (True, 64% correct)
5. Moving expenses may be a valid tax deduction if you moved for work or school. (True, 85% correct)
6. Selling a personal item valued under $1,000, online, is a taxable transaction. (False, 72% correct)
7. It is possible to make an adjustment to your tax return after filing. (True, 83% correct)
8. You are responsible if your spouse doesn't file their taxes. (False, 51% correct)
9. You can give your child a tax-free gift of any amount. (True, 50% correct)
10. An inheritance received by a Canadian resident is tax-free. (True, 54% correct)