Comedian Ray Romano once said, “Having children is a lot like living in a frat house – nobody sleeps, everything’s broken, and there’s a lot of throwing up.”  But aside from being highly amusing calamities at times, families are also powerful economic unions which are subject to fairly complicated tax rules. Those that master the art of saving together become powerful economic units. There is no better time than post tax-filing season to review your opportunities and become important savings [...]

Tax filing season is over for close to 20 million Canadians whose tax returns have already been assessed this year. Of those, 14%, or just under 3 million taxpayers, had a balance due. On average, they owed $3700 upon filing; the rest got refunds (65%) or filed a nil return (21%) to receive refundable tax credits. Did you miss claiming something? Now is the time—out of the fray—to double check.  Here are some common mistakes taxpayers make in claiming their [...]

There are lots of ways to do better for yourself at tax time; starting with the filing of your tax return as soon as possible if you missed the April 30 deadline. You’ll be subject to a late filing penalty if you have a balance due, plus interest, so do get it done this week to avoid possible gross negligence penalties of 50% more. Working together with your tax and financial advisory team is critical to maximize your opportunities—especially if [...]

The Fraser Institute published an interesting paper by Francois Vaillancourt in April 2010 on what it costs Canadians to comply with their personal income taxes. Leger Marketing did a detailed survey for the national think tank on a sampling of 2000 tax filers based on the 2007 tax filing year. The key results: the use of a tax pro has increased significantly over the past 20 years. 39% of Canadians paid a pro in 1986; 51% of Canadians paid in [...]

In Canada, we have a tax system based on self-assessment and voluntary compliance. It works extremely well, considering how complex the topic is, with the overwhelming majority of individuals and corporations meeting their obligations on time. It is exactly for these reasons that the proposed payment of a 15% finder’s fee to those who help the government identify extensive international tax fraud may set a worrisome precedent that could erode the CRA’s vision and values and with it, the principles [...]

Canada’s household wealth grew at an annual rate of 7.8% between 2000 and 2012 according to the 2012 Credit Suisse Global Wealth Report, which also predicted last October that with moderate and stable economic growth, total household wealth will rise over the next five years by 50% around the world. Moreover, the number of millionaires worldwide is expected to increase by about 18 million people, reaching 46 million in total by 2017. While China will surpass Japan as the second [...]

Canadians with foreign holdings at any time in 2013 (not just at the end of the year), will need to provide more information to the CRA, starting with the 2013 tax year. This will include money on deposit in foreign bank accounts and marketable securities, which are considered to be specified foreign properties. Problem is, many Canadian tax filers miss ticking off the box on the tax return that requests information on holdings over $100,000. More details on “specified foreign [...]

You haven’t done your taxes for a year or two or more – yikes – now what? Bottom line: get on it, quickly, and more important, start a relationship with a qualified tax professional who has taken a recent audit defense course. While I am a big fan of tax software, representing you to CRA is the one thing tax software won’t do for you, although some companies may offer to link you with a tax pro who can help. [...]

According to a new report, the middle class, women, and seniors have been stellar investors in the Tax Free Savings Accounts, amongst the 8.2 million Canadians who opened one up to the end of 2011. The financial assets held in TFSAs based on the Tax Expenditures and Evaluations 2012 report released last week by the Finance Department was $62Billion. Good on us, Canada! For the year 2011, the analysis found amongst other things: 80% of individuals with incomes under $80,000 [...]

Aside from understanding that Canadian residents are taxed on world income in Canadian funds, there are only a few basics you need to know about the marginal tax rate system in Canada. That’s important because these points will help you understand how the next dollars you earn will be taxed. Under our “progressive system of taxation,” you’ll pay more the more you earn, but you may also receive less in tax credits—which are a form of income redistribution. First know [...]