Know What You Are Entitled To When Filing Your Taxes This Year

Studies have found that the richest pay the lowest rates of all income groups. Ask yourself am I filing for every possible option that may entitle me to a greater refund? You are your own best advocate in helping yourself find every possible refund you may be entitled to.

Here are a few to consider and research to see if you qualify?

The Ontario Property Tax Credit

• Assists those who own or rent and who have low to mid level income.

• If you are under 65 you may qualify for a refund of $250

• If you are a senior over 65 it could be as much as $625 as a refund

There is a Child Fitness Tax Credit

• If your child is under the age of 16 years you could be entitled to a $500 Credit to help off set your child’s fitness expenses.

• As long as you can provide proof exceeding $500 in a physical activity you may be able to claim this for each child.

Day care tax credit or Child Care tax credit may apply to you?

• This is a deduction you can claim to reduce your amount of income.

• This includes a variety of programs you may not have considered.

• Individuals providing daycare services, sports or any day or overnight camps.

Tax Credit for Medical Expenses

• This applies to you and your dependents if you have significant medical expenses.

• Proof of payment needs to be supported. Have your pharmacy print out the entire year of history for you if you have not kept all of your receipts.

Look into a Family tax Credit or Tax Benefit

• These are both from the Federal Government and the Provincial Government.

• If you consider yourself to have a lower income these may apply to you and your family.

• These programs are designed to provide additional income.

• There are 5 categories to look into to see if you qualify.

The Educational Tax Credit

• If your child has received a scholarship or bursary, it should come with an education tax credit.

• You do not have to report this on your tax return.

• If not than you can claim the first $500 to be tax free but must report and pay taxes on anything over and above.

Often It’s difficult to know how to file your taxes correctly. You especially want to make sure you have claimed all you are qualified for, before filing. The government has a Tax Filing Assistance program that may help to make sure you are exploring all of your options and getting the best advice. They have locations set up all over Ontario find the closest one near you visit http://www.cra-arc.gc.ca/tx/ndvdls/vlntr/menu-eng.html

If you have followed our articles then be sure you file for your $5000.00 Energy Retrofit Home Grant detailed in our November 3^rd 2011 article.

For more valuable information please visit us at PrudentFinancial.net

Reasons To Steer Clear Of Instant Payday Loans

With all of the assistance that a cash advance could actually offer it is rather incredible to some that there are really instances that they are wisest to be bypassed. Selecting the appropriate decision for your specific particular circumstances is not simple, however there are instances that it is proper to bypass a payday advance at all cost to be certain that your finances stay on target. Picking the wisest choice for your specific needs is not always easy, but if you take the time to study your budget, it is normally quite easy to choose the final decision.

If you are reviewing your finances and realizing that there is nowhere, you can potentially squeeze the payback of the loan in; it will normally be a very good idea to bypass a check loan. If you are scared that when the moment arrives you may not be able to pay it back it is as well normally a wise idea to circumvent them. They are extremely beneficial to have access to, nonetheless it is extremely critical for your financial health that the advances be repaid extremely fast to avoid any possible hassles with not having the money to manage additional bills. What many shoppers do not understand is a check loan could turn very expensive if you renew it continuously.

While a fabulous sale down the way might appear like a wonderful purpose to run out and acquire a cash loan it is critical to look at the numbers linked with the discount. For instance, if you are looking to attend a sale that is 25% off and there are roughly $100 worth of items you are wanting to purchase you would be looking at a savings of approximately $25. This is all prior to any sales tax is assessed. If we believe that a $100 check advance would cost you $15 then you will only be saving about $10 from the advance total, and this is before considering that state tax will probably chew up the remainder of the savings that you were looking to receive. Looking at the special in this light, it quickly does’t seem like quite a fabulous deal anymore.

Additionally, if you are looking at a bill that could be tacked on a charge card at a cheaper interest rate then it would typically be a very smart decision to do so. Charge cards even at their highest place generally offer dramatically cheaper interest rates than cash loans do. Also added in the truth that you can remit the bill off during a period of time could create them a substantially wiser choice if your finances are stretched beyond belief. Of course utilizing a charge card isn’t a choice for everyone, however if it is an option it is something that must be strongly considered to make certain that you are getting the most usage out of your cash and keeping yourself on track financially. If you review the greater image of your finances, you might be amazed at just how much you could save by racking up charge card debt rather than acquiring the cash loan that you thought was a fabulous package. 

How do I know I have too much debt?

I saw a commercial recently with two neighbor’s chatting in the front yard. One had large numbers tucked under his arm representing his savings plan. The other neighbor, clipping the hedge had the number "gazillion" under his. The "responsible" neighbor asked him,

"How much money are you going to need to retire comfortably?"

The hedge clipping neighbor responded

"A gazillion dollars". Neighbor one asked him, "How much are you putting away for retirement?" Neighbor two responded "I dunno, I just throw a bunch of money at it and hope for the best."

Neighbor two's situation, surprisingly, is a lot more common a scenario then one might think. CBC's Metro morning ran a feature February 13, on the surprising number of people in the greater Toronto area who have full time jobs, but are still living in the poverty range.

http://www.cbc.ca/metromorning/episodes/2012/02/14/working-poor/

Let's run some numbers and see where you compare?

How much debt is too much debt?

Let's assume you are making 65,000 a year. Depending on where you live, the government may take approximately half of that in taxes.

Let's now assume you have a monthly take home of 3000.

Your mortgage (or rent) is 1400.00 per month.

Let's also allow for high interest debts (credit cards, car loans, personal loans etc.) of 3000.00 in total.

If we run all of this through a debt calculator, we see your estimated monthly loan repayments are $1,490 which equates to 49.7% of your disposable monthly income. You will find this is a dangerously high ratio. Most likely, running these numbers, you'll find you're also spending about 3% of your disposable income just servicing short-term debt.

What does this all mean? If you lose your job the amount of time you'll have to recover before debt catastrophe is only a few months.

Furthermore, you'll have a difficult time putting anything away for a rainy day, let alone retirement with this high a debt servicing to income ratio.

What's the solution?

You'll either need to increase your monthly after taxes income, or receive a low interest loan from a family member or close friend.

Is Your Mortgage coming due?

With interest rates as low as they are, this can present a huge opportunity. Merge outstanding high or medium interest debts into your mortgage and pay them off over a longer period of time, at a lower interest rate.

For more money saving tips go to PrudentFinancial.net

Are You Protecting Yourself From Identity Theft?

Prior to the dawn of the Internet the term identity theft would conjure up images of pick pockets and dumpster diving. With the advent of the information age, Identity fraud or impersonation has steadily become a much more prevalent crime in our society. In Canada 20% of us have been victims of identity theft. Who wants a collection call regarding an overdue amount on a card you never knew you had? Educating yourself is the best deterrent.

What’s in your trash? Identity thieves obtain your information from the items you put at your curb on trash day, and even from the receipts you throw out in a public garbage can. Even an out of date Mortgage statement or a tax statement has enough information on it to get them started in duplicating your identity. The solution is simple, shred or destroy anything that has your name on it prior to throwing it out. Digital information stored on your computer or CD’s is a little harder to re-cycle. If you are selling your old computer or donating it, often wiping, deleting or reformatting will not be enough. Depending on your computer, research what software you need to wipe your hard drive clean for good.

Good Old Fashion Mail. Do you make sure you get all your statements from whom you should monthly? Make it a priority of opening and reading every bill and statement you get monthly. What if one went missing would you ever know it? Identity thieves often pray on pre approved credit cards and will often commit mail fraud to do it. Make sure you know if anything goes missing so you are one step ahead and can call your bank and change your information before they use it.

Paying Bills On Line. It’s difficult not to use the Internet for some kind of transactions, weather it’s making sure a phone bill is correct or banking in general. The key is to make sure you are using a secured page to do so. Look for a lock in the browser bar or “https” that means your data will be sent encrypted. Beware of “Free Trials”. They may be a net set up to catch your personal information to use it to further re-create your identity or to obtain your credit card info.

Why Obtain Your Own Credit Report Annually. If you don’t know what yours looks like how do you know you are not already a victim of identity theft? Usually most people find out when it’s too late and they are in need of credit. Stay ahead of the criminals and protect yourself.

Create A Secure Password. Your password should be made up of upper and lower case letters and numbers. This makes for a stronger encryption. One tip is to use numbers that look like letters. Substitute 5 for an S for example.

Social Security Number? Memorize It? Keep your S.I.N. out of your wallet! It is the one number associated with you that, in the wrong hands could lead to years of bad credit.

Remember you are your own first line of defense in protecting yourself from the unforeseen.

For more valuable information please visit www.prudentfinancial.net

The Facts behind a Tax Free Savings Account

The Canadian government has really gotten behind the Tax-Free Savings account with an ambitious educational campaign. You can view their latest press release here. the introduction of the TFSA The Tax-Free savings has been called “the single most important personal savings vehicle since the introduction of the Registered Retirement Savings Plan (RRSP)”. These accounts are truly an opportunity and shouldn’t be passed up.

How does at Tax-Free Savings account work?

The TFSA is similar in scope to an RRSPs. Your contributions are made with after-tax dollars but when you make a withdrawal you aren’t taxed. However there is an interesting difference. Any withdrawal from the TFSA account creates an equal amount of contribution room. This provides the opportunity to save for a car, a vacation, whatever your heart’s desire in a tax-smart manner, and even replace the savings in the future.

Something else worth noting; earnings within the account and withdrawals do not have an affect on income-tested benefits. This would include Canada Child Tax Benefit or Guaranteed Income Supplement.

Another great feature of the TFSA is that earnings within the account and withdrawals do not affect income-tested benefits such as the Old Age Security or GST credits. A TFSA is really a win win situation regardless of whether you’re in the low-income bracket or a higher earner.

The bare bones explanation?

The TFSA investment is simple. Every Canadian resident who is at least 18 years old can contribute up to $5,000 per year (indexed to inflation) to a TFSA. Any income earned inside the TFSA is totally tax free, even when withdrawn from the TFSA.


The major difference between an RRSP and a TFSA ? 
The RRSP is like having an interest-free loan from the government, but a loan that eventually has to be repaid. 
A TFSA results in a complete avoidance of tax – not just a deferral. You can make withdrawals from your TFSA for any reason, however this does defeat the purpose. And it’s a disadvantage. It’s far better to keep some sort of injection of money going into your TFSA so you’ll be able to earn that tax free return each year.

What kind of investments should you consider with a TFSA? Interest income is always a good start, bonds and debentures. Interest is the form of investment income that is usually taxed at the highest rate, so this form of income within a TFSA is an automatic choice.

For more money saving tips go to Prudentfinancial.net