Avoid these 6 TFSA Mistakes in 2022

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.

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Making Interest Payments Tax Deductible

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.

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15 Ways to Damage your Financial Well-Being Mid-Life

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:

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Fundamental Estate Planning Concepts

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

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Medical Expense Tax Credits (METC)

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.

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Income Tax Assessments, Reassessments & Audits

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.

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Claiming In-home Office Expenses

COVID-19 has brought much change to how Canadians conduct their
business affairs and working from home may become permanent for many
people.

Employees who have moved to working from home, or who are self employed and maintain a home-based office, are eligible for tax deductions to cover some of the costs.

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Preparing your Heirs for Wealth

If you think your heirs are not quite old enough or prepared enough to discuss the wealth they will inherit on your death, you’re not alone. Unfortunately though, this way of thinking can leave your beneficiaries in a decision-making vacuum: an unnecessary predicament which can be avoided by facing your own mortality and making a plan.

If you have a will in place, great. A will, however, is only a fundamental first step, not a comprehensive plan, point out authors of the 2017 Wealth Transfer Report from RBC Wealth Management.

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