I find it somewhat annoying and clients often have difficutly:
Why not Total Tax / Total Credits / Balance Owing (Refundable)?
…and yes…it’s always been this way, but this year it’s annoying me.
(Maybe it’s just me, LOL?)
Because that’s the way the income tax act is laid out:
Division A (section 2) - Liability for tax (about one page)
Division B (sections 5-108) - Computation of income
→ gets you to NET INCOME
Division C (sections 110-114) - Computation of Taxable income (i.e. deductions)
→ gets you to TAXABLE INCOME
Division D (sections 115-116) - Taxable income for non-residents
Division E (sections 117-127) - Computation of Tax (i.e. tax rates, then tax Credits)
Division E.1 (section 127.5) - AMT
Division F (sections 128-143) - Special Rules
Division G (sections 144-148) - Deferrals
Division H (section 149) - Exemptions
→ gets you to TAX PAYABLE
MIssed the point…it’s not about the structure of the ITA (with which I’m well familiar), but the presentation of total tax, total credits and net balance, which is a UI and readability issue…not for me…I see the raw amounts, but for clients.
You mean just how TAXCYCLE presents it? Seems pretty much the same as other tax software I’ve used over the years - they all have summaries like this which seem to reflect the structure of the tax act.
On the other hand, I agree with you it would be nice if the whole income tax system was overhauled and simplified - kind of like the structure you mentioned:
Or, are you referring only to how the REFUNDABLE credits are applied after Total payable (line 43500)? You remember - the NON-refundable credits are applied before you get to Net federal tax (line 42000), then the refundable credits (like tax deducted at source or CPP overpayment) are applied after? Of course that’s how it has to be, because if the non-refundable credits are greater than “total tax”, you’d have a negative balance at line 43500, which, if carried through, would effectively be refunded. That can’t be allowed if the credits are “non-refundable”.
Notthingn to do with the structure of the ITA or the presentation of income/deductions/credits. For the most part clients don’t care about how we get there…but they DO want to see what their total tax bill is, the total amount paid, either by source or instalment etc and then a balance.
For me it’s ONLY about the $$ tax payable, the amounts paid and the balance due.
In the clip shown, the total credits ($4,344.00) do not show…this is not logical IMO.
Ah. I see. So, just how TaxCycle presents it on this summary - missing a subtotal for the refundable credits. Makes sense.
I have similar complaints about the way they calculate the “effective tax rates” on the T1 Summary.