Albert Einstein had an accountant.
Widely regarded as one of the most intelligent humans ever to live, Einstein found taxes more complicated to understand than his theory of relativity. He said as much to his long-time friend and accountant Leo Mattersdorf:
One year, while I was at his Princeton home preparing his return, Mr. Einstein, who was then still living, asked me to stay for lunch. During the course of the meal, the professor turned to me and, with his inimitable chuckle, said:
“The hardest thing in the world to understand is income taxes.”
I replied: “There is one thing more difficult, and that is your theory of relativity.”
“Oh, no,” he replied,” that is easy.”
-Leo Mattersdorf, letter to Time Magazine, 1963
Einstein was referring to the U.S. Tax Code, but he would likely find our version—the Canadian Income Tax Act or ITA—just as baffling.
The ITA is about 3,000 pages long and well over one million words. Add in Canada Revenue Agency (CRA) information circulars, interpretation bulletins, and technical interpretations, and we have tens of thousands of pages.
To say tax planning is complex would be the understatement of the century.
But at its core, tax planning can be summarized in only four strategies. Conveniently, they all start with the letter D:
Shumaila Chowdry
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