Various Tax & Money Tips - October 2024 Prudent Money Coach Tax & Money Tips

Photo by Debby Hudson on Unsplash

Happy Thanksgiving  everyone! I hope you and your family are well. I can’t believe it is already October. I am grateful for many things - health, family, friends, home, etc. I am sure you have many things you are thankful for. 🙂

This past summer I had an opportunity to do some networking and I am happy to report that I recorded a few reels with a tax lawyer and with a DIY (Do It Yourself) investor, asking them to share money-related tips. This newsletter is longer than usual because I want to share the tips with you.

Here are tips from Anna Malazhavaya, a tax lawyer from Advotax Law in Toronto.
Q1: When should you see a tax lawyer?
 A1:
1. If your accountant (or tax professional) asked you to.
2. If you want to maintain SCP (Solicitor Client Privilege) - where a client can communicate candidly and in confidence with his/her lawyer.
3. If you would like to receive comprehensive tax advice.

Q2: What should you do if you are audited by CRA (Canada Revenue Agency)?
A2:
1. Hire a professional who can advise you on what you should or should not provide to CRA.
2. Budget your time to collect documents that CRA requests.
3. Do not ignore the time limit set by CRA. If you need more time, request it from the CRA auditor.

Here are tips from Bilaal Dhalech, a DIY investor.

• Invest regularly, for example $25/week or $100/month. 
• Buy Exchange-Traded Funds (ETF), which is a basket of securities that can be bought and sold like an individual stock. An example is VFV, which is Vanguard S&P 500 Index ETF. It is a stock index that tracks the share prices of 500 of the largest public companies in the United States.

Here are my tax tips for students, which were originally scheduled to be published in September. 

• Even if a post-secondary student has no income or minimal income from a part-time/summer job, he/she should still file his/her tax return to claim tuition amount paid as a tax credit. Students can claim tuition tax credit even if someone else paid the tuition fees.

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• If the tuition tax credit is not needed to reduce the student’s taxes, there are options for the credit. 
  1. Transfer all or a portion of the unused federal and provincial tuition tax credit to a spouse (or common-law partner), parent, grandparent or spouse’s (or common-law partner’s) parent or grandparent.
  2. Carry-forward the unused tuition tax credit for the student’s future use.

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• If you pay interest on your post-secondary (federal) student loan, you may be eligible to claim the interest you paid for that year or the preceding 5 years even if someone else is paying the student loan. Make sure you have a statement showing the interest you paid. The statement should also show that it is a document you can use for your tax return.

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• You may be eligible to claim moving expenses if you have income that is required to be included in your income. There are requirements to be met. See the link in the sources below.

That’s all for now. Due to my workload, I may not be able to publish a November newsletter. So see you in December. 


Sources: 

• https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-32300-your-tuition-education-textbook-amounts/transferring-carrying-forward-amounts.html
• https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31900-interest-paid-on-your-student-loans.html
• https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21900-moving-expenses/line-21900-you-a-full-time-student.html
• https://www.lawsociety.ab.ca/resource-centre/key-resources/professional-conduct/solicitor-client-privilege-and-demands-for-disclosure/
• https://www.investopedia.com/terms/e/etf.asp
• https://www.forbes.com/advisor/investing/what-is-sp-500/
• https://www.advotaxlaw.ca/anna-malazhavaya
• https://bdinvesting.org/about