A selection of books to help you navigate the latest tax changes from Ottawa
Ray Turchansky
Sun
Nothing wreaks havoc with annual books on income taxes like a winter federal election, when vote-luring tax changes are announced close to the tax filing season.
Yet at least 10 such guides to help taxpayers navigate a sea of T-slips and schedules managed to make it out in time for this year’s tax deadline at the end of April.
One can just imagine the last-minute scrambling that went on when former finance minister Ralph Goodale announced a series of tax changes in his Nov. 14 economic update.
Of course, it’s years when there are bountiful tax changes that attract taxpayers to bookstores.
A major reason for the proliferation of tax books is the preponderance of grey areas in Canada’s Income Tax Act.
Tax books tend to be one of three varieties: the academic tomes that go through the income tax return line by line or topic by topic; the accounting firm versions that try to highlight the major areas and explain them; and the user-friendly offerings with as much tax-planning advice as information and interpretation.
Here’s a selection of the tax-related books available for readers this year, starting with two of the most in-depth offerings:
– Preparing Your Income Tax Returns
(Michael Mallin, CCH Canada Ltd., 1,473 pages, $72.)
Preparing You Income Tax Returns remains the bible for serious preparers of individual income taxes.
Variously called “The Andersen,” when it was written by the Arthur Andersen accounting firm, and now, “The Mallin,” it is the reference book used by major firms teaching income tax preparation. Not usually available in big box book stores, it can be found in independent stores, which often take reservations for the book because it’s a high ticket item they don’t want to overstock.
The book has tremendous detail with all sorts of stats, such as historic year-by-year average currency exchange rates set by the Bank of Canada. It’s a topic-by-topic book, often offering some background and examples on how to treat various tax situations. The author occasionally expresses humour and bewilderment about the way some tax items are treated. Chances are if you don’t find the answer to a tax question here — although it may require looking in a number of places — you won’t find it in the other annual books.
This is a book to buy every four or five years, whenever there’s been a number of major tax changes from budgets and economic statements.
– Line-by-Line
(Jim Morrisey and Peter Wood, Canadian Institute of Chartered Accountants, Ernst & Young, 1,102 pages, $49.95.)
Line-by-Line is an interesting guide, literally a full-blown version of the T1 General guide that comes with your income tax form. It follows the T1 form in order, expanding on what can and cannot be included in each line, and listing other lines that have an effect on the one you’re checking out.
There is a detailed chapter on each of the provincial and territorial tax return forms, and in fact roughly half this book contains every form and schedule you’re likely to come across. Inside the back cover is a bonus CD, said to be worth $120, containing all the forms which you can download.
Preparing Your Income Tax Returns and Line-by-Line complement each other quite nicely. If you know the item or topic, you can find out about it quickly in the former. If you know the line number, it’s easy to get help using the latter.
– Tax Planning 2006
(KPMG. Thomson Carswell, 340 pages, $20.95)
– How To Reduce The Tax You Pay
(Deloitte, Key Porter, 278 pages, $19.95)
– Smart Tax Tips
(Grant Thornton, Key Porter, 296 pages, $18.95)
Each of these annual books by accounting firms handles most of the major tax situations nicely.
I personally like Tax Planning 2006 the best, primarily because there’s more detail and it’s the product of nine contributing editors from across the country, representing various areas of expertise.
Visually it’s the most reader friendly, with a number of pull-out boxes highlighting examples and tips on topics being discussed. The other two books tend to be more superficial.
But all these books are hit-and-miss. Each one handles some topics better than the others. One thing they have in common is a minimal number of information charts, something that could be bolstered.
– Essential Tax Facts
(Evelyn Jacks, Knowledge Bureau, 224 pages, $20)
– Winning The Tax Game 2006
(Tim Cestnick, Wiley, 308 pages, $26.99)
– Beat The Taxman 2006
(Stephen Thompson, Wiley, 226 pages, $26.99)
– Tax Tips For Canadians For Dummies
(Christie Henderson, Wiley, 345 pages, $19.99)
These books are of the self-help variety, geared more towards tax planning and savings than tax preparation, thus they have a value of their own.
Evelyn Jacks of Winnipeg has evolved over the last couple of decades from being a tax preparer to a tax author, famed for her Jacks on Tax books, to an educator. A few years ago she set up The Knowledge Bureau, providing a network of speakers on subjects ranging from taxes to fitness to wine.
In dozens of books, Jacks has attacked taxes from various angles — knowing your deductions, a line-by-line guide, and looking at taxes in tough times and for the long term.
This offering, Essential Tax Facts, contains 233 ways to save taxes, and expands on them. As usual, she has nuggets of information everywhere.
Like Jacks, Tim Cestnick is a regular guest on ROB-TV’s Talking Tax and regularly authors tax books, as well as writing a tax column for the Globe and Mail. But while Jacks is an educator, Cestnick remains a practitioner, with WaterStreet Group. He may be the most visual tax expert in Canadian media. His Winning the Tax Game 2006 is a bit of a cross between Jacks’ book — his offers 102 tax tips — and the accounting firm books. His writing is clear and easily understood and covers most major topics.
Stephen Thompson’s Beat the Taxman 2006 is aimed at small business owners, certainly a growing field in Canada. It deals with many of the classic business start-up issues — to incorporate or not and when you have to charge GST — and addresses practices like accounting.
Of course, the most basic of self-help books is the Dummies series, and Cestnick’s every-day language is also evident in Tax Tips For Canadians for Dummies, of which he is senior editor. The book does a good job explaining many every-day tax matters in down-to-earth fashion, but don’t expect it to solve tricky situations. It’s a good starting point.
Ray Turchansky is a freelance writer and income tax preparer. He may be contacted at [email protected]
© The Vancouver Sun 2006