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Canadians expecting sizable tax returns this year

Canadians expecting sizable tax returns this year

With tax deadline looming, Canadians are anticipating substantial refunds this year.

Nearly six in 10 (57 per cent) say they expect to get some money back this year, according to a recent TD survey. Of those anticipating a refund, 61 per cent expect to receive up to $1,499.

The survey didn’t look into why Canadians are counting on a refund, but it’s likely dyue to RRSP contributions, rather than just wishful thinking.

A Bank of Montreal survey earlier this year found that the average contribution was $3,984, up from $3,738 last year.

The top three ways Canadians said they would use their tax refunds were paying off credit card debt (28 per cent), adding the money to an emergency fund (21 per cent), and contributing to an RRSP or TSFA (21 per cent), the TD poll found. 

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 “This tells us there is an appetite to use any expected funds in a way that helps Canadians achieve their financial goals,” says Adrian Lawford, assistant vice president of personal savings and investing at TD Canada Trust. “If one of those goals is to maximize a tax return in 2016, an individual could consider taking their 2015 return and making a lump sum RRSP contribution.”

How long they’ll have to wait to get their refund depends on a few things, including how they filed.

The average processing time for returns done by Netfile is 10 business days, while those who stick with paper will have to wait another four to six weeks, according to the Canada Revenue Agency.

Direct deposit is the fastest way to get money in hand; people who are expecting a paper cheque can tack on at least three to five days to their wait time.

Your refund may be delayed if you owe money to a government agency, such as a payment for Employment Insurance benefits or a balance due from a previous year’s return.