As all Canadians know, home ownership is getting more unaffordable regardless of
the buyer’s age. Rental suites are becoming increasingly expensive as rents in major markets soar and short-term rentals, like Airbnb, replace traditional units which normally would have been available.
The Covid pandemic forever changed the way Canadians viewed their relationship to their employer and working from home rather than a traditional office. Many ventured into the world of being self employed either as a full-time independent contractor or on a part time basis, and the term Gig Economy was born.
The recent federal Budget in March 2023 introduced Canadians to a new financial tool meant to make the entry into residential home ownership more of a reality for many.
The FHSA will allow eligible Canadians to make a tax-deductible contribution to a savings vehicle geared solely for their first home purchase.
In December 2021 the federal government announced that the 2022 annual TFSA limit will remain at $6,000. This means the cumulative tax-sheltered lifetime limit is now at $81,500.
As I have explained to many clients, there is no “downside” to owning a TFSA, any TFSA is better than no TFSA. However, many people make mistakes with the accounts which can cost them in the long term.
We all want to reduce our income taxes and deducting interest payments on mortgages, loans, Lines of Credit or even credit cards can do that.
Canada Revenue Agency (CRA) has set criteria and rules that allow for the deduction of interest under certain situations. The key factor is the money you borrow must be used to generate income.
Since my 1980 start in the financial industry, I have had many clients retire only to realize a big disconnect between how they envisioned their retirement versus the assets that they have accumulated.
For most people, it is not just one mistake made over the years, but rather a multitude of poor financial decisions, many of which were implemented mid-life (from age 35 to 55).
The 15 most common reasons that financial health was negatively impacted:
Draft a Will
Dying “Intestate” creates legal and financial obstacles for your family, something which could easily be avoided with a Will.
By not having a Will the government will use a default selection, stating how assets are to be split between your spouse and children
With April being the month most of us are thinking of filing our tax returns the subject of Tax Credits should be of interest to many of you.
Tax Deductions and Tax Credits are two entirely different tools to reduce our income taxes. A tax deduction lowers a person’s tax liability by reducing their taxable income.
In 1917, during the First World War, the Canadian Government introduced The Income Tax War Act as a temporary measure to fund the war program.
This was the first time both individuals and corporations were taxed, and taxes finally became a permanent source of income for our Government when it was enacted under The Income Tax Act in 1948.
Did you catch this article in the Vancouver Sun this week? Jamie Golombek offers some great insight on how to maximise the tax benefit of your generosity. It’s a quick read, well worth your time.