#kickoutcarney - Michelle

🇨🇦 WHEN YOU OWE THE CRA MONEY, THEY CHARGE YOU INTEREST. WHEN THE CRA OWES YOU INTEREST, THEY TAX IT. And that’s not even the most interesting part. Here’s something most Canadians probably don’t know. During July–September 2026, the CRA’s prescribed interest rates were: 🚨YOU OWE THE CRA: 7% 💰 THE CRA OWES YOU: 5% Both rates are calculated with daily compounding. But there’s another catch. Interest paid to you on an income tax refund is generally TAXABLE. Let’s imagine $10,000 accruing interest for a full year at those rates, purely for illustration. If you owe the CRA: At 7%, that’s roughly $725 in interest with daily compounding. If the CRA owes you: At 5%, that’s approximately $513 in interest. But if your marginal income tax rate is 30%, you could lose roughly $154 of that refund interest to income taxes. You keep approximately $359. Same $10,000 principal. Very different outcomes. Now, there’s a legitimate reason tax authorities charge interest on overdue payments. Without it, taxpayers would have an incentive to delay paying what they owe. And refund interest compensates taxpayers when eligible overpayments remain with the government. But the asymmetry is worth understanding. The interest rates aren’t necessarily equal. And the interest you receive isn’t necessarily what you get to keep. There’s another important detail. The CRA generally starts charging interest on overdue personal income taxes immediately after the payment deadline. Refund interest, however, generally starts only after specified waiting periods. WHEN YOU OWE MONEY, THE CLOCK STARTS TICKING. WHEN YOU’RE OWED MONEY, THE RULES FOR STARTING THAT CLOCK ARE DIFFERENT. This isn’t the biggest financial problem facing Canadians. But it’s exactly the kind of detail that deserves more attention. Because understanding how the tax system works shouldn’t require being an accountant. THE CRA KNOWS THE TIME VALUE OF MONEY. CANADIANS SHOULD TOO. 🍁 @wealthmoose