Pay Day
  • With so many tax-related computer programs out there, filing your own income taxes doesn’t have to be complicated. But not even the most sophisticated software can prevent people from making the kind of dumb mistakes—or from telling little lies—that raise a red flag with the Canada Revenue Association.  

    Here’s a look at common blunders that tend to trigger assessments or audits.

    Extra zeros:

    There’s a big difference between claiming $15,350 on meals and entertainment for business expenses and $1,530.

    “Accounting firms received an email from CRA last week about taxpayers adding extra zeros, resulting in huge tax liabilities,” says Christian Stewart, certified general accountant and founder of North Vancouver’s Stewart & Associates. Be sure to triple-check your return before filing.

    Fibbing about a pastime being a business:

    “Taxpayers will often claim a hobby business on their tax return, reporting losses year after year,” Stewart says. “Common ones would be an artist who never sells a

    Read More »from Common tax blunders likely to trigger an audit
  • A pharmacist pours Truvada pills back into the bottle at Jack's Pharmacy on November 23, 2010. (Getty Images)A pharmacist pours Truvada pills back into the bottle at Jack's Pharmacy on November 23, 2010. (Getty Images)

    One of the least-used tax credits is also one of the murkiest. By not claiming certain health-care costs via the Medical ExpenseTax Credit, Canadians could be losing big dollars.

    “The opportunity to save money is not used…because you’ve got to keep some records and have some efficient way to calculate the deduction,” says John Crawford, chartered accountant and chief financial officer of health insurer Pacific Blue Cross. “There’s a lot of interpretations as to whether something qualifies or doesn’t qualify in relation to the Canada Revenue Agency. Certain items need qualification and certain items are not quite clear. But things that are not claimed can all add up.”

    A good example is premiums paid to a provincial health plan.These are not eligible. However, premiums you pay to an insurer through workplacebenefits programs generally are.

    “Why is one deductible and why is one not? It depends what province you’re in as well,” Crawford says.

    Inconsistencies are another reason the Medical

    Read More »from Canadians missing chance for cash with medical tax credit
  • It must be hard being a Nigerian prince. I mean, every time you try to get someone to stash your cash – for a nominal fee, of course (wink!) – in an overseas bank account, you’re hit with skepticism thanks to all those scam artists trying to rip-off the average non-Nigerian-prince-knowing Canadian.

    These are the same sort of Canadians that account for the $70 million fraudsters pocketed in 2014, according to the Canadian Anti-Fraud Centre. Which is why Canada’s growing fraud problems – scam artists claimed $53 million in 2013 – keep Phil Norris, spokesperson for the Competition Bureau, up at night.

    “Fighting fraud is a never-ending battle, it does not discriminate, and no one is immune from it,” says Norris. “What that means is that whatever your education or income… no matter where you live, you can still fall victim to fraud.”

    And the perpetrators are only getting better at it.

    “Naturally, with the rise in popularity of online purchasing and social media use, we have seen a shift away

    Read More »from Money Minute: Canada’s top scams
  • Common myths are everywhere: sharks don’t get cancer (not true); the Great Wall of China is visible from space (ditto). They exist in the world of personal finance, too.

    Myth: I don’t need to worry about our budget or finances because my partner manages the money.

    Fact: “Even if someone else is in the driver’s seat, you should be an active passenger; not asleep in the backseat,” says Linda MacKay, senior vice president, retail savings and investing at TD Canada Trust. “Sit down at least a few times a year to review your finances, budget and goals. You should know where your accounts are and have access to your investment, credit, and bank statements. And even though you’re not the driver, you still might be responsible for any financial accidents, so taking ownership of decisions is important for everyone involved.”

    Myth: I should avoid saving until all my debt is paid off.

    Fact: “While it’s important to pay off your debt, it’s also important to save for your future,” MacKay says. “One

    Read More »from Top 10 personal-finance myths
  • When Adam Bacon finished his studies in digital animation in Vancouver last year, he had two options: take a job in his field in his hometown or accept one that paid less in Montreal. The 23-year-old didn’t think twice. He hopped on a plane and moved east.

    “I moved because I want to travel and experience the world while I’m young and able to, and this was a perfect opportunity to visit a new place and start my new career,” Bacon says. “The salary is comparable to what I would be making in Vancouver, although I did turn down slightly higher-paying jobs in Vancouver in order to take this opportunity.

    “Relocating has done wonders for my professional development,” he adds. “The job I originally took was basically an internship, but it has developed into a full-fledged career.”

    A lot of Millennials find themselves choosing between a local gig or a job further afield. Or they might have no other option but to leave home (and Mom and Dad’s basement) to gain work experience. Regardless of the

    Read More »from Relocating for work? The pros and cons to weigh
  • Forget unpaid internships: New ways to get your foot in the door

    As any job-seeker knows — or as Millennials may soon find out once the academic year winds up in a few months — sendingout résumés and waiting for anoffer is a strategy that’s likely to bomb.

    About 80 per cent of availablepositions are never advertised, according to InterviewSuccessFormula.com. While in the past unpaid internships were presented as a great way for young people to get their foot in the door, they’re in fact illegal in many provinces, according to the Canadian Intern Association, with few federal laws regulating internships directly. Besides, interns often find themselves running errands rather than doing real, meaningful work.

    But there are fresh ways of gaining work experience, and two Canadian companies in particular are taking new approaches when it comes to introducing the next generation to the workforce.

    Ten Thousand Coffees is one of them. Created by young people for young people, it’s an online platform that links youth with professionals from more than 30

    Read More »from Forget unpaid internships: New ways to get your foot in the door
  • With the loonie slipping below US$0.80 it can’t help but feel like we will always be the cheaper, less successful (but better looking, obviously) younger siblings to the U.S.

    We know. It’s a tough pill to swallow, especially for Canadians whose requisite remedy for the jealous sibling blues is stateside retail therapy or sipping mojitos in Fort Lauderdale.

    But a mere 35 per cent of March Break travellers are headed to international destinations this year, compared to 56 per cent last year, says a new CIBC poll. Of those travelling for the week-long hiatus, 26 per cent say the suffering loonie has impacted their travel plans.

    For those planning a cross-border jaunt, your biggest hope at getting the most bang for your buck is to focus on avoiding sky-high greenback-to-loonie currency conversion rates and fees, says Stephen Fine, president of 49th parallel hopping comparison site www.crossbordershopping.ca.

    “The only thing people can really control is minimizing the fees and getting the

    Read More »from Money Minute: How to pocket more money when travelling outside of Canada
  • With news that Sears Canada and Hudson’s Bay Company are being investigated by Canada’s consumer watchdog because of allegedly-deceptive marketing practices, it’s no wonder consumers often find themselves wondering if a deal really is a deal.

    The Competition Bureau is looking into the two chains over alleged pricing strategies that made it look as if some products were being sold at a discount, when in fact, they were going for regular price. It’s early days of the investigation, and it may turn out that neither store did anything wrong, but even the idea of questionable pricing strategies makes it challenging for people to tell if a sale price is a good price.  

    Stores use all kinds of tactics to lure people into spending their hard-earned cash (while making them think they’re scoring a deal).



    Anchor decoy

    Consider the “anchor decoy”. William Poundstone explains the phenomenon in his 2011 book, Priceless: The Myth of Fair Value (and How to Take Advantage of It). He uses Williams

    Read More »from Shopping: When is a sale really a deal?
  • Ever combed through an auto insurance policy and gotten that awkward vibe that says, “this could be a scam and I wouldn’t know it.”

    Don’t worry; your skepticism is a universal thing or at least an inherent worry of your fellow Canadians.

    A survey by TD Insurance found that just over half of us (52 per cent) wouldn’t ask their insurance provider to elaborate on the things they don’t quite understand in the policy.

    Of those, 31 per cent think the details would be too complicated, 31 per cent say they don’t have time, 23 per cent are just straight up embarrassed for not knowing. Then there’s the 19 per cent of disinterested Canadians who don’t really care about their insurance policies or their stupid fine print.

    It probably all stems from the idea that we should know more than we do. Chalk it up to the age of “Googling” as a verb or maybe it’s the endless stream of comparison tools that do our work for us.

    That might be why 37 per cent of Canadians don’t bother to skim the fine print on

    Read More »from Money Minute: Why car insurance rates vary so much
  • RESPs: What happens if your child doesn't go to university?

    Many Canadian parents diligently put money aside every month for the kids’ post-secondary education. But what happens to that cash if those young ones later decide not to go to university?

    It’s a question Robert Armstrong, vice president and head ofmanaged solutions at BMO Global Asset Management in Toronto, hears all thetime.

    “The number one concern I get with all our clients is ‘Ifour children don’t pursue post-secondary education, do we lose our money?’

    “That’s one of the key reasons why some people are hesitant to open an RESP,” he adds. “Who knows what your child’s going to do in 18 years? That scares a lot of people.”

    Rest assured, parental units: You do not lose that money.

    “Whatever you put into your RESP you get back, no question, no tax, no issues whatsoever,” Armstrong says.

    But, keep in mind that whatever money the government kicked in through the Canada Education Savings Grant (CESG) or the Canada Learning Bond goes back to its rightful owner.

    But an added bonus is that any

    Read More »from RESPs: What happens if your child doesn't go to university?
  • When Cathie Hurlburt and her husband were contemplating whether to renovate their home or buy something bigger toaccommodate their growing family, the Vancouver certified financial planner“did the math 90 times”. The result favoured renovating every time.

    The cost to move can be exorbitant, especially in priceymarkets like Vancouver and Toronto. By the time realtor commissions (typically 7 per cent on the first $100,000 and 2-3 per cent on the balance of the purchase price in B.C.) property-transfer taxes, legal fees, and moving expenses are factored in, you’re easily looking at $50,000 in costs. That’s not including any potential mortgage penalties.

    “You might as well be rolling up 20s and lighting them on fire,” says Hurlburt, a partner at Integrated Planning Group. “And I have not had a client move into a new house and not drop another $5,000 on something: a new fridge or new carpeting or new towel racks or — ‘the car doesn’t actually fit in the garage.’”

    Renovating is an option that

    Read More »from Renovating vs. moving: It's a numbers game
  • Canadian’s fake-it-‘til-you-make-it financial approach doesn’t seem to be working out.

    While 59 per cent of Canadians say they are dedicated to their savings plan, closer scrutiny shows otherwise with a third of Canadians regularly biting into their long-term savings for trips, cars or interior decorations, according to a survey by Tangerine bank.

    “People want to sound like they know what they’re doing, like they’re money experts,” says Laurie Campbell, CEO Credit Canada Debt Solutions. “But the truth of the matter is, it’s the simple strategies to put money away that people are not following.”

    The survey echoes Campbell’s sentiments with an unapologetic 50 per cent of Canadians saying they have no savings goal.

    “I get very concerned because they don’t even have the basic savings in place such as an emergency fund or something for a rainy day should something happen to them,” she adds. “We recommend people have three to six months of their income for basic expenses in an emergency fund

    Read More »from Canadians raiding their savings to splurge, if they save at all: survey
  • As Monday’s RRSP deadline hangs overhead, Nunavut retirees-to-be are Canada’s keenest contributors, according to tax-filing software maker TurboTax.

    Chalk it up to saving funds to escape the cold in retirement or tackling the absurdly high grocery bills – either way, people from Nunavut top the rankings for highest average RRSP contributions across Canada nearly doubling the typical Canadian contribution of $5,461.06 by earmarking an average $9,372.00.

    The closest second is Yukoners, who set aside an average of $6,774.84 this year. Albertans trail a bit further behind, contributing an average of $6,097.96.

    The software maker has also found only one in five Canadians filing taxes through its platform have contributed to their RRSP.

    City-to-city, Torontonians lead the pack contributing an average of $8,074.21. Calgarians follow, putting $7,487.34 into their RRSPs and Vancouverites are stashing an average of $7,079.38 this year.

    Unsurprisingly, Baby Boomers are the most avid savers

    Read More »from Only 20 per cent of Canadians have contributed to RRSPs with Nunavut leading the charge: Turbo Tax
  • RRSP season always brings with it this unsettling fear that if you don’t have millions of dollars tucked away in some hidden box marked “retirement” you’re in trouble.

    “A lot of people end up freaking out and not doing anything about it because they think it’s hopeless,” says David Trahair, financial writer and accountant at David Trahair and Associates.

    It’s what spurred him to write his latest book, which looks to quell the woes of retirement savings procrastinators.

    “I’m 56, raising kids and paying the mortgage – there’s not thousands or tens of thousands of dollars lying around to put in an RRSP, it’s just impossible,” says Trahair. “But the theme is, all is not lost, there’s a lot you can do in ten years or less and that’s what a lot of people are going to be doing for retirement.”

    A lot of the mentalityy stems from the arbitrary guilt that seems to seethe out around RRSP season, he says, but the truth is RRSPs aren’t always the right approach.

    “A lot of people hear this thing

    Read More »from Money Minute: Who should not get RRSPs
  • The spring housing market is starting to bloom, but before you jump in, it’s worth doing a detailed breakdown of what it actually costs to run a home. There’s more to your budget than property taxes and mortgage payments.

    And speaking of property taxes, don’t assume that what you see on realty websites is accurate.

    “Property taxes may be higher than initially quoted on MLS or Realtor.ca,” says Burnaby, B.C. certified financial planner Satpal Rai. “If you’re purchasing from a senior, for instance, your taxes will be higher if you’re not 65-plus yourself.” 

    Home insurance may be higher than what you’re used to as well, especially if you have a bigger space on a bigger lot further away from fire and emergency services. Figures from InsurEye Inc. from 2012 show that Canadians pay an average of $840 annually for their home insurance, with B.C. having the highest rates, at $924 ) annually.

    Other costs to consider include:

    Utilities

    “Your new home may be more costly to heat,” says certified

    Read More »from The true cost of running a home
  • Patricia Arquette’s call for wage equality is expected to rekindle the debate about what women are being paid in the workforce not just in the U.S., but across Canada.

    Workplace experts say companies that aren’t already working on closing the wage gap between men and women need to act soon, or face losing workers to more progressive organizations.

    “It’s an issue companies are going to have to start paying closer attention to,” says Sheryl Boswell, director of marketing at job-search websiteMonster.ca.

    In her acceptance speech after winning best supporting actress for her role in Boyhood on Sunday night, Patricia Arquette said women have spent years fighting for everybody else’s equal rights.

    “It’s our time to have wage equality once for all. And equal rights for women in the United States of America,” she said, prompting fellow nominee Meryl Streep to jump out of her seat and shout “Yes! Yes!” – a reaction that quickly went viral on social media,

    Read More »from Patricia Arquette's Oscar speech puts spotlight back on gender wage gap
  • John Ferrie remembers how anxious he was when he got a notice from the Canada Revenue Agency a few years ago indicating his tax return wasbeing audited. The Vancouver artist didn’t think he had done anything wrong, but the news still made him nervous.

    “It was a registered letter,” says Ferrie, a painter. “It basically said ‘You’re this number. Make sure you have all your papers lined up.’

    “I just thought, ‘What on earth is going on?’ I’m a really creative thinker, and the first thing you do is just panic. I had no idea where this came from or what it was leading to. I’m the kind of guy with a giant box full of receipts; I have an abacus on my wall and count on my fingers and toes. Nothing else is explained to you; you just have to have your accounting ready.”

    Ferrie says he hired an accountant to help walk him through the process. Although sometimes people just have to mail in documents to support their claims for a tax review, an auditor visited Ferrie at his studio. He was there for

    Read More »from What happens when your tax return gets audited

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