Income Tax Is Like A Four Letter Word

Income Tax Return

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Income Tax for some people is like a four letter word, they just don’t want to hear it, and dread the April 30th, 2013 deadline we have here in Canada to file a personal income tax return.

But it does not need to be like that.

I have prepared and  been filing personal and small business tax returns for over 15 years. What started for me as a seasonal job, with H&R Block to supplement my regular income, has turned into a small business.  I find it incredibly rewarding when I help people take advantage of all tax credits that are available to their families. From arts and sports credits for kids, to home improvement credits for seniors, there are many credits people don’t think of when filing their taxes.

Tax Credits

Tip: Did you know that if your Grandmother needs a shower bar in her bathroom, that she can get a tax credit for having it installed? If you need to have your home wheel chair accessible, there is a credit for that too.

Most people know of the “popular” tax credits, medical, rent, property taxes, and childcare. What they may not realize is that the childcare credit also covers things like paying for a day camp for a PA day, or summer camp in the summer or simply paying the neighbourhood childcare provider who watches your kids for March Break.  The child care credit does not go away because your children are in school.

Charitable donations are a wonderful way to bring down your payable tax bill; registered Ontario Charities give receipts for cash donations, and a fair market value receipt for donations of goods.

For instance, that bag of clothes and old Tupperware you drop off at Goodwill, make sure you grab a receipt.  Are you pledging $10.00 for your nephew to participate in jump rope for heart, keep the receipt?

How To File Income Tax

Most average Canadian families do not need a CPA (Chartered Public Accountant) to prepare their taxes, nor would they want to pay those types of fees.  There are many options for filing your taxes, you can do it yourself using one of the many Income Tax preparing software programs available whether web-based or store-bought. Examples are Turbo Tax Canada, Studio Tax, Genutax, Ufile, Netfile, H & R Block Canada etc. Alternatively you could go to one of the “big box” preparing offices, or find someone like me, with years of experience that will prepare and file your income tax return for a fraction of the cost.

Please don’t ever use “Cash Back” tax services if you don’t need to. In this day and age, if you have an income tax refund coming, you will receive it in about 10 days, after E-File with Direct Deposit. Cash Back services keep a large portion of your return. The amounts that are charged are regulated by the government and are 15% of the first $100.00 and 5% of every $100.00 after that. That can calculate to $90.00 plus HST on every $1000.00 of your return. (On a basic return)

Some Income Tax Deductions Tips to maximize your tax refund and lower your payable:

  • Claim medical expenses- People miss claiming common expenses like Blue Cross, and fees paid to medical practitioners like speech-language pathologists, occupational therapists and acupuncturists.
  • Maximize babysitting deductions- The maximum dollar amounts claimable have not changed this year, still $4,000, $7,000 or $10,000, which depend on the child’s age and health. Usually it’s the lower earner who should claim these expenses.
  • Minimize tax on severance- If you’ve lost your job, your severance package can help but it can also put you into a high tax bracket because it’s usually paid in a lump sum. One way to reduce your taxes is to maximize your RRSP contribution room.
  • Claim the new tax credits for children’s activities- Many parents are still not aware of this Children’s Art tax credit. Parents can claim up to $500 of eligible expenses per child under the age of 16 at the beginning of the year in which the expenses are paid or under 18 at the beginning of the year in which the expenses are paid and if they qualify for disability tax credits. Any eligible expenses in 2011 and subsequent years would qualify for this credit. There are new amounts to be claimed on the tax return for enrolling your children in the arts or sports activities. Because the Children’s Arts Amount is new, you’ll need to remind yourself to dig out the receipts.

What you can’t claim (but I am frequently asked if you can)

  • Interest on your mortgage (unless you have income property)
  • Medical expenses for pets
  • Home Improvements (with some exceptions, the “new healthy home credit, is one)
  • Funeral costs, wedding costs and legal fees paid for separation or divorce agreements
  • Public Transportation costs if paid daily or per use (Monthly Pass purchases can be claimed as a credit in Ontario)
Average Cost To File Your Income Tax Return

However you choose to file your Canadian Tax Return, be sure to keep all receipts and supporting documentation of everything you claim. You can expect to pay anywhere from $30.00-$200.00 to prepare and file a basic return in Canada. You may pay around $200.00 on the high end for a CPA, $80.00 for a “big box” tax preparing office, and $30.00 for an experienced private tax consultant.

I also can’t stress enough the importance of using your maximum allowed RRSP contributions each year. In Canada we have until March 1 st 2013 to make contributions that will benefit our 2012 Income Tax Return. Budget accordingly and try to contribute as much as you can each year. Your maximum allowed limit can be found on your 2012 Income Tax Assessment.

For more information on your tax return: Canada Revenue Agency.

About The Author: Kim Rosa, a mom and grandmother,semi retired from a long career in the restaurant industry.  A red seal chef, Kim spends her time these days, as a part-time chef/consultant at a fine dining Bistro in South Western Ontario, as a small business operator, doing books for a few local restaurants, and preparing taxes during tax season. An avid couponer,and advocate of frugal living. Kim shares her love of couponing and deals on her Facebook page:  Coupon Ontario

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December 2012 Canadian Budget Binder Budget Update

Canadian Budget Binder Monthly Budget Update
What happened in December in the CBB House? 

Christmas and New Years have come and gone and now the bills are going to come piling in. Like many others December is a busy month for our budget although we do somewhat prepare for these expenses. We did go over in some categories like clothing for example where Mrs.CBB needed a new winter jacket and pair of winter boots. Both of which we were able to score for %50 off and they are a great quality product. Sometimes it’s worth waiting for those great boxing day sales in Canada. You can actually take that expense of $247.97 and double it and $495.94 would have been what we would have spent if not for the sales.

Our gas was up slightly this month, not over budget but we spent more because we had to travel for the holidays. We also paid a bit more on the mortgage this month to make it an even $154,000 that is left to pay. Yes we have had the cash to pay that in full since last month. I’ll be talking more about this in the next little while. If you live in Ontario you know that the prices for your vehicle sticker have gone up. We had to pick up a plate sticker so we thought why make 2 trips so while we were there we picked up a sticker for our other vehicle for next year. I also picked up some items for work which is fine as I’ve hardly spent anything this year on work materials.

Our grocery expense for December was lower for a couple of reasons

1-We went away for the holidays

2-We spent too much in November so we had to cut back in December

Changes to the Budget This Month:

You won’t see many changes to the budget in December however I just posted adjustments we made to our Canadian Budget Binder 2013 Family Budget. While you are reading our 2013 family budget update don’t forget to enter to WIN $100 cash! You will see how we did in 2012 and what our new figures will be going into 2013. You will also read about why we made the changes to our budget.

December Monthly Overview:

We have 3 Canadian Bank Accounts with our Chequing account being with President’s Choice Financial. We chose PC Financial as one of our banks because we didn’t want to pay any bank fees. We also have never felt the need to see anyone personally inside of a bank but if we do Canadian Imperial Bank of Commerce (CIBC) will gladly help us out as PC is affiliated with CIBC.

  1. Chequing- This is where all the bills get paid from.
  2. Emergency Savings- This is where our Emergency money sits.
  3. Savings- This account holds money for projected expenses.

The CBB Family December Budget Breakdown

    • Monthly Budget Total: $5797.85
    • Monthly Net Income Total$8370.79
    • Total Coupons Used (this includes everything such as points redeemed, big box store coupons, not just grocery coupons: $279.06  up from $202.21 in November
    • Projected Expenses: These are expenses we know we will pay for throughout year and save monthly for = $1257.39
    • Total Expenses Actually Paid Out$4997.27

Total Expenses Actually Paid Out Calculated is $8370.79 (total monthly income) –$2116.13 total monthly savings)–Projected expenses $1257.39 = $4997.27

Actual Cash Savings Going Into Emergency Savings Funds$2116.13

Calculated is $8370.79 (total monthly net income) – $4997.27 (actual expenses paid out for the month)–$1257.39 (projected expenses) $2116.13  (Total Savings for December)

The Outcome: December

PE=Projected Expense  is money which is automatically saved each month ready for when the bill comes in or for when you need it as in the example below. We go over our projected expenses at the beginning of the year to set up our yearly budget and adjust as we go along if a new projected expense arises and needs to be added to the budget. This has happened on many occasions but it’s bound to happen as we can’t predict everything we have to pay for over the course of the year. The important part for us is that we are saving for the expense and we no longer have to stress about taking money from our savings to pay for them.

Example: Clothing we budget $10 per month. If we don’t spend it we move it to the projected expenses account. This means we should have $120 per year for clothing to spend. We have to track that expense as we spend it.

  • A/C Service /Maintenance- PE $12.50 Spent $0
  • Allowance $15.00  Spent $41.75
  • Birthday PE $10.00  Spent $0
  • Car Repair/Maintenance PE $23.50  Spent $160.03
  • Christmas PE $25.00  Spent $332.91 (300 yr budgeted)
  • Clothing PE $10.00  Spent $247.97 (wow!)
  • Dentist/Prescriptions PE $5.00  Spent $47.61  (will get most reimbursed)
  • Electricity/Water PE $153.05  Spent $344.82 (This bill comes every 2 months)
  • Entertainment-$7.00  Spent $15.80 Over $8.80 (party animals that we are)
  • E-test PE $4-Spent $39.55
  • Extra Mortgage Payment 5 week- PE- $101.26 Spent $0
  • Furnace/Hot Water Rental PE$112.38  Spent $112.38 (This bill is every 3 months)
  • Union Gas (domestic)-$59.19  Spent $58.21
  • Gasoline/Diesel (vehicle)-$192.00 Spent $185.66
  • Grocery- $190.00 Spent $71.02 Play The Grocery Game With us to Save!
  • Home Maintenance PE $329.00 Spent $83.92
  • Car/Home Insurance-$205.17 Spent $205.17
  • Income Tax Filing PE$2.50 Spent $0 (this may change in 2013)
  • Investment-$767.00 Spent $767.00
  • Licence Renewal Fees PE $11.84 Spent $0
  • Life Insurance-$135.05 Spent $135.05
  • Lottery-$12 -Spent-$14.50 Over $2.50 (2 free plays added encore)
  • Membership/Club/Sports PE $6.00 Spent $0
  • Miscellaneous-$125.00 Spent $113.56
  • Mortgage-$1389.12 Spent $1712.39
  • Parking-$5 -Spent $0
  • Pet PE $83.33 -Spent $0
  • Property Tax PE $287.45 Spent $0
  • Emergency Savings-Saved $3373.52 (this includes PE)
  • Vehicle Sticker PE $16.00 Spent $179.00
  • Cable/Internet/Cell/Home Phone-$146.19 Spent $146.19
  • Work Tools PE $50 Spent $105.16

Overall: We are happy with our December numbers. We are hoping with the budget changes for 2013 that we will make an even bigger difference come January 2014.

Check in at the beginning of  February 2013 to see how we made out in January 2013!

Question: Did you make any changes to your budget for January 2013?

It's Not About How Much Money You Make It's How You Spend It

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Merry Christmas To All!

Surprise Christmas Gift

Merry Christmas to all the fans who read and follow Canadian Budget Binder. I know today is supposed to be The Grocery Game Challenge but SURPRISE I’m bumping that post to tomorrow. Actually a few of my posts will be different this week as I have a special post slated for Friday so my blog post picks will be on Thursday.

FREE GIVEAWAY!!

Don’t forget to ENTER the $100 CASH GIVEAWAY that I am co-hosting. Open to USA and Canada or as long as you have PayPal. Giveaway ends on December 28,2012~ Contest is now closed.

I just wanted to take a moment today to thank each and every one of you that reads Canadian Budget Binder. I put a lot of effort into making this a fun, informative environment where we all learn from each other’s successes and defeats.

Canadian Budget Binder will be coming up for its one year anniversary soon and I’m thrilled to see how fast we continue to grow. I really wanted to do something special so if you don’t already know the blog will be going through a re-design for the new year. I want to continue to champion this site to grow and it’s with your help that I can make this happen. If you have any brilliant ideas you want to share with me please email me.

The Budget

With 2013 just around the corner now is the time to start setting financial goals and really take a look at areas you can make changes in your budget. If you are not using a budget and want to 2013 is a great starting point. You can read my budgeting series 1-10 which details how Mrs.CBB and I designed and use our budget. If you haven’t had a chance to read how one fan got her budget back on track because of what she learned here at Canadian Budget Binder take a few minutes to read her amazing story.

The Grocery Budget

If you really want to work on lowering your grocery budget and if I can motivate you to post your grocery shop with us each week I’m doing it now. It’s super easy and you can track your shops all year-long. All of us that post our shops help each other out with suggestions and ways to save whether it be coupons, flyer specials, frugal recipes and more. Join in the grocery game challenge fun starting every Tuesday on the blog. I’ve updated the rules to the grocery game challenge to include some new figures that we wanted to track all year. Have a peak and let me know what you think.

I’ll be spending the next few days with our family and friends but I’ll be checking in to see what you are all up to.

Love and Laughter To All,

Happy Holidays,

Mr.CBB

It's Not About How Much Money You Make It's How You Spend It

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Mr.CBB’s Blog Post Picks- Dec 21,2012- Christmas, Immigration and Miss Universe

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Mr.CBB’s Top Blog Post Picks of the Week

Well the countdown to Christmas is on and we are ready to drink up and eat until we no longer can look at food. No, we really don’t eat that much but we sure do indulge as it’s the one time of year we can eat foods that we don’t normally have in the house. Don’t worry I won’t bore you with all that end of the world crap you are reading today. Rather let’s focus on the what we DO know. As we move forward towards the end of 2012 we remember all the losses and all the victories we have had in this world. Keep them close to your heart and always remember them.

Miss.Universe Crown comes home to the USA yesterday to American Olivia Culpo. I’m not sure how I feel about these pageants as I clearly don’t watch them nor do any other men I know. I sometimes wonder if it truly is to motivate women to be the best they can be and never give up. What are your feelings about these pageants and are they a good idea? I don’t know if there’s a men’s pageant but if there is I likely wouldn’t watch that either.

There also may be hope for new younger immigrants to Canada with a new point system. This means that we may see immigrants actually using their skills in a job other than taxi driver as part of Canada’s Immigration System revamp.  Immigration Minister Jason Kenney says they want to be able to bring the engineers and doctors that they select to actually work in their skilled field.

“Kenney outlined the new point system which would favour younger immigrants and those who have English or French language proficiency.  There will also be a more rigorous review of an applicant’s credentials to ensure they transfer to Canada”

When I moved to Canada from the UK with my University Degree it pretty much meant nothing unless I went back to get certifications and upgrades hence my return to school but in a different field. I hope for those that do make it here with these skills are able to use them to their full capacity.

Giveaway: If you haven’t entered to WIN $100 Cash through PayPal or an Amazon Gift Card Click here and ENTER NOW!! Good Luck

Blog Post Picks Of The Week

In no particular order enjoy my blog post picks of the week. Thanks to all of you for sharing my page with your fans and taking the time out to drop in and comment on my post.

Recipes of the Week:

Twitter follow friday tweet tweet

Twitter  Personal Finance and Other Peeps to Check Out!

This is a list of the Twitter Tweeps That I Follow that Tweeted 2 times or more from Friday to Friday my own Canadian Budget Binder Blog Posts.

Happy Holidays To Everyone! I hope you have been enjoying Mr.CBB’s blog post picks this year. As we countdown to Christmas and there after we have one week left of this post to go for 2012. I hope to continue bringing you the best of personal finance and food in 2013! -Mr.CBB

It's Not About How Much Money You Make It's How You Spend It

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CBB Net Worth Update~November 2012

Money Bags

I can’t believe November has come and gone so quickly, now it’s time to get into the festive mode and thinking about our yearly goals for 2013. By posting our CBB Family Net Worth and Budget Update once a month here is a means to motivate ourselves to continue down our financial path. We are a Canadian couple who make an average salary and want to know where we stand each month. We want others to know that you don’t have to make 6 figures to have a Net Worth. There’s no race to the finish line because no one really knows where that line is. You could die tomorrow or you may live until you are 110 years old.

What does Individual Net Worth mean?

Net Worth is a snap shot of your financial health sort of like a picture. It’s a total of the value of your assets minus your liabilities. Posting our financial numbers is about showing others how budgeting has worked for us.

Who’s the Man behind Canadian Budget Binder?

My name is Mr. CBB and I’m the frugal guy that does all the talking around here. Yes, some women think Frugal Men are Sexy and I’m here to show you how to spot one! Well not really but I’m sure you will have a good idea just by reading posts I’ve written around this blog.

There is also a Mrs. Canadian Budget Binder but she does not currently blog here. Together we are Canadian Budget Binder. We started our Canadian Budgeting Journey to lead us towards a happier financial future. No one handed us money on a silver platter and we earned every penny whilst returning to school twice along the way. Toss in a huge move from the UK to Canada and you can see life has had it’s ups and downs for us financially. There are financial implications when you move across the world something I wasn’t prepared for.

I enjoy learning from others who enjoy finance and taking care of their future before the future takes care of them. No one will have the magical answers for your financial situation, you need to figure out what’s right for you. I can’t tell you what’s right or wrong, all I can do is tell you what worked for us. After all I’m not a finance professional and you should consult with one when dealing with your own money, just like we do.

I blog at Canadian Budget Binder to encourage, motivate and help others who think that budgeting is a waste of time and can’t help them out of debt. I also like to connect with people who believe a budget is what they need to get back on track and are positive about getting back on track.

If you aren’t serious or don’t understand the reality that budgeting is important than don’t waste your time. It doesn’t matter if you owe money, you need to see the numbers every month. Don’t make budgeting seem as if it’s only for people who are not in debt, because that’s the wrong way to perceive it.

How To Determine Net Worth?

Realize that no one can snap their fingers and make your debt disappear.  Figuring your Net Worth is not hard it’s just a step in the financial process that comes together as long as you have all of your numbers ready. When budgeting anything is possible, we are proof of that although we still have a long way to go in our journey.

These are our numbers and our goals, not a means of comparison towards your own goals. We don’t care how much money others make or if their net worth is more as it’s not a competition, it’s about hope. It’s about hope that we can follow a financial path in life that is not so stressful no matter if you have thousands or millions in the bank. I hope what I post for you, the fans, about our experiences perhaps will help guide you along that financial path towards debt freedom. Sometimes seeing our own numbers is what it takes to kick it into high gear like it did for us. I encourage you to learn what your own numbers are and make them work for you.

Money is Money, Debt is Debt, A Budget is SMART-Mr. CBB

Canadian Budget Binders Financial Health

I received a question last month about our Emergency Savings Account. In the past I have mentioned why it is so high but want to go over that again for those wondering. The money in our Emergency Savings account is the money we will use to pay off our mortgage in full in early 2013.  So there, now you know.

Let’s see how we did in November!

November Net Worth Update 2012(1)

Note : Double Click Photo to see it full size as I can’t make it any bigger for some reason.

In October when I did our Net Worth Update I did it a few days into the month and I made an error, sorta. What happened was I used the figures a week into November to calculate our net worth which made October artificially high and November artificially low including the mortgage. Silly mistake but we’re all human and mistakes happen. Although I try to get this done by the end of the month sometimes I have to push it back. I accidentally took the wrong numbers which I caught this month.

Remedy: So this doesn’t happen again if the post will be late I will pull the numbers at the end of the month so when I do write the post the numbers are  accurate. This will be a goal for next year although this was the first time I made this error. I also lost money on my pay this month when I took a week’s vacation as they used my wage from last year which was half of my wage this year. Starting in January 2013 this post will change as we will be paying off the mortgage and investing more of our money.  I may go to percentages instead of dollar increase/decrease unless you want to still see the $$ figures. It’s only up from here on in!

Do you know how to calculate your own Net Worth? Why not go ahead and calculate your own using our Free Tool Net worth Calculator (Canadian Budget Binder 2012)

It's Not About How Much Money You Make It's How You Spend It

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