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Latest News
Inflation: How It Affects Your Finances + MORE Jun 13th
Much of Canada’s economy has ground to a halt amid the COVID-19 pandemic. One of the effects of this has been a drop in prices for many items. Most notably, gas.
As a result of consumer prices dropping, Canada’s inflation rate went negative to -0.2% in April, according to Statistics Canada, whi.... More »
What does the average wedding cost in Canada? May 15th
“But you’re getting married! You have to!” That empty statement is on the other end of everything from wedding cakes to bachelorette parties, lace veils, engagement photo shoots and selfie stations. It seems that from the very minute you are betrothed, everyone and their mother (perhaps especi.... More »
Financial advice for a second marriage + MORE Nov 11th
Q: I am a 50-year-old divorced male. After dating for 3 years, I am about to propose to a lovely lady (48-years-old). She is very financially independent. With my lack of retirement savings (long story involving a divorce settlement and a business venture that did not work out), I plan on working .... More »
How to choose a retirement date May 19th
(Getty Images / shapecharge)
Q: With $560,000 in RRSPs between my wife and I, $37,500 in TFSAs and another $120,000 in savings, is it wise to stop working now or continue to 65? I am currently collecting $870 from the Canada Pension Plan (CPP), but also working. I am on track to earn $100,000 or mo.... More »
Top Ways to Save Money As a New Parent + MORE Jan 18th
As a new parent, it’s very easy to go overboard on spending. After all, who wouldn’t want to shower an adorable new human with an influx of cute items? The truth is, you can spend as much or as little as you want and still have all the necessities for your little one. These days, there are so m.... More »
How to pay off debt and save for the future
– moneysense.ca
(Illustration by Amedeo De Palma)Phil and Candace Ranjan are smart people. In fact, the two chiropractors have four university degrees between them. And for a young married couple still in their 20s, they also have a healthy combined income of $110,000. But the pair, who live in London, Ont., also has three huge liabilities: $47,000 in student loans, $94,000 on a line of credit and a $400,000 mortgage on a home they purchased last year for $431,000. In total, they are starting married life deep in the red, with net liabilities of $96,800. “We have huge expenses and absolutely no spending money,” says Phil, 29. “We’re professionals but we’re not earning to our fullest potential. We know we need to pay down our debt but aren’t sure which way is best. And we’d love to start investing but we just can’t seem to save any money. It’s frustrating.”
The Ranjans (whose names we’ve changed to protect privacy) married last fall. They spent two years saving up for the cost of their wedding and $31,000 for a down payment on the 1950s-style red brick bungalow they now own…
The tax shock that comes with a first real job can be a great chance to help your kids take control of their financial affairs.Moving investments to a new country
– moneysense.ca
Q: If you are moving out of the country, how much of your investments can legally go with you?
—Mark Scanlon, Brighton, Ont.
A: Legally, you can take whatever investments you’d like. But there are a few tax issues to consider. Toronto chartered accountant John Mott says, “If you liquidate investments before you leave, you will of course be taxed on any capital gains that you trigger. If you leave while still holding investments with accrued capital gains, then you are treated for tax purposes as if you had sold the investments, making the gains taxable.”
This is called a “deemed disposition” but doesn’t apply to RRSPs. So you could leave the money inside your RRSP, and pay income tax on it down the line when you withdraw it. If you’re a non-resident when that happens the withdrawal will be subject to a flat 25% non-resident withholding tax, unless reduced by a tax treaty. If you decide to remove the RRSP investments before you become a non-resident, Mott says, then the withdrawal will be taxable on your final tax return before your date of departure…
—Mark Scanlon, Brighton, Ont.
A: Legally, you can take whatever investments you’d like. But there are a few tax issues to consider. Toronto chartered accountant John Mott says, “If you liquidate investments before you leave, you will of course be taxed on any capital gains that you trigger. If you leave while still holding investments with accrued capital gains, then you are treated for tax purposes as if you had sold the investments, making the gains taxable.”
This is called a “deemed disposition” but doesn’t apply to RRSPs. So you could leave the money inside your RRSP, and pay income tax on it down the line when you withdraw it. If you’re a non-resident when that happens the withdrawal will be subject to a flat 25% non-resident withholding tax, unless reduced by a tax treaty. If you decide to remove the RRSP investments before you become a non-resident, Mott says, then the withdrawal will be taxable on your final tax return before your date of departure…
Do landlords need to incorporate?
– moneysense.ca
Aaron Vasas, Fenwick, Ont. (Jennifer Roberts for MoneySense magazine)Q: I have three rental properties with a total of four tenants. Should I consider starting a holding company or limited corporation for my income properties? What are the benefits?
—Aaron Vasas, Fenwick, Ont.
A: Run a dental practice—start a corporation. Run a rental property business—don’t bother. Different types of businesses are treated differently by the CRA and the tax system isn’t set up to encourage landlords to incorporate, says Hank Bulmash, a CPA at Bulmash Accounting. “Essentially they are saying, ‘We are going to tax your corporation as if you owned the properties personally.’” The corporate income tax rate for rental income is the same as the highest marginal tax rate—so there are no tax savings. The exception is if your business has at least five full-time employees. That makes it an “active business” and it qualifies for the small-business tax rate, in the 15% range. But it doesn’t sound like you have that many people on payroll…
The Smartest Way To File Taxes: 4 Tips
– ratesupermarket.ca
RRSP season has come and gone – and now it’s time to focus on filing your income tax return. If you were a last minute RRSP contributor (or missed it altogether), filing your tax refund early can be a way to redeem yourself. The deadline to file may seem a long way away, but it’s never too early to start planning.
Here are our top tips for getting the most out of your taxes this year.
Tip 1: Understand the Canadian Tax System
Doing your income tax can seem like a chore, but it doesn’t have to be. In Canada we have a progressive tax system – the more income you earn, the higher your tax rate. Those in higher tax brackets will gain the most from tax deductions.
The onus is on individuals to claim the tax deductions and credits they are entitled to. There are dozens of these deductions and credits available to individuals and families, all of which can add up to hundreds in tax savings. In fact, in 2012 the average family of four could have saved more than $3,200 annually in taxes, according to Canada Revenue Agency (CRA)…
