 Photo by Gareth Harper on Unsplash REMINDERS: - You will need to have your taxes up to date to take advantage of government benefits you are entitled to, such as Canada Dental Benefit and Canada Housing Benefit. - Applications for the Canada Dental Benefit will open on December 1, 2022. - Applications for the Canada Housing Benefit will open on December 12, 2022. - If you still need to catch up on your taxes, do so before January 20, 2023. After this date, CRA will shut down for a week in order to prepare itself for the 2023 Tax Season. CRA will announce a date when 2022 taxes can be filed. (PS: It's usually around late February.) December 2022 Tax and Money Tips - Year-End Stuff Early Merry Christmas, Happy New Year & Seasons Greetings! We have arrived in the last month of 2022. Traditionally this is a super busy time for many, thus this month's newsletter will be brief. :) There are so many year-end tax and money tips. Below are just a few. 1. If you plan to claim car expenses as your business expenses or employment expenses, record your odometer reading on New Year's Eve (December 31, 2022) or New Year's Day (January 1, 2023). 2. Max out your RESP (Registered Education Savings Plan) contribution by December 31, 2022. Remember that if you or your child are a US citizen, please consult a Cross Border Tax Specialist before you open an RESP so you will be aware of tax reporting requirements to IRS (Internal Revenue Service). 3. If your medical insurance company uses a calendar year for claims, ensure you have your medical services done by December 31st. Start booking appointments now. 4. All donations must be received by your charity(ies) by December 31st to be counted as 2022 gifts. Exceptions are mutual funds and securities donations. These have earlier deadlines. Check with your financial advisors and your charity(ies). Send them in early. 5. This one tip has nothing to do with year-end, but year-end may be a good time to do it. Check if you have named primary and alternate beneficiaries on all your registered accounts, pension accounts and life insurance. Examples of registered accounts are RRSP (Registered Retirement Savings Plan) and TFSA (Tax Free Savings Account). Even if you have named beneficiaries, if it was done some time ago, it may be time to re-visit and ensure you still want the same beneficiaries to get your assets after your passing. December is a busy month, so prioritize what you need to finish. Visit https://PrudentMoneyCoach.com/blog.html for more tax and money tips or follow me on LinkedIn, IG, FB, Twitter for more tax and money tips. To have monthly tips delivered to your inbox, send an email with subject "Subscribe" to PrudentMoneyCoach@gmail.com. See you in 2023!
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 Wow, it's November already! Are you busy shopping for Christmas or do you have holiday parties planned out already? Generally people are generous around Christmas time. Here's a question for you: if you budget your Christmas spending, should you also budget your Christmas giving? Does it sound strange to have a budget for donations? Short answer is no. You may get a lot of requests for donations as it gets closer to Christmas. Having a budget will allow you to know that you're not giving beyond what you're willing to give. And yes, it's ok to turn down donation requests. Anyhow, November is Financial Literacy Month in Canada. The government of Canada has a website dedicated to this: https://www.canada.ca/en/financial-consumer-agency/campaigns/financial-literacy-month/about.html Check it out. There is so much information there. Now, let's get right to this month's tax and money tips. 1. Let’s start with a basic principle. Income - Expenses = Net Income Income is not just your salary, it may include government benefits, investment income, rental income, pension, or others. If you receive company benefits, you may want to convert it to dollar equivalent and count it as your income to get a true picture of all sources of your income. Your actual income may be higher than you think. Whether a lot or a little, your income MUST always be greater than your expenses. If you can’t cut your expenses, you need to increase your income. If you need help with budgeting here are some resources you can look into. a. The Government of Canada has a website dedicated to money topics and there is a lot of good information and tools there. Check out canada.ca/money b. McGill University also offers free personal finance courses. Check out https://mcgillpersonalfinance.com/ c. I listened to a podcast today from Money Wise; the topic was Budgeting Basics. Here is the link to listen to it: https://www.moneywise.org/moneywise/budgeting-basics-4274 2. If you believe God owns everything, then you are just a manager of what He has entrusted to you. Have you been managing it well? How much of His money are you giving back to Him via tithing or giving? How much of His money are you using for yourself? Did you know that there are more than 2,000 verses about money in the Bible? Here is a catalog of 2,350 Verses on Money and Possessions from Compass: https://compass1.org/wp-content/uploads/2022/02/2350-Verses-Catalog.pdf Were you surprised that there are so many verses? 3. OK, now on to tax-related financial literacy. Are you familiar with financial abbreviations in Canada such as RRSP (Registered Retirement Savings Plan), TFSA (Tax Free Savings Account), or RESP (Registered Education Savings Plan)? Did you ever wonder what GST/HST credit is? Or BCCATC? Or CCB? All these are acronyms that you probably see in a letter from CRA. So, in brief, here they are: a. The goods and services tax/harmonized sales tax (GST/HST) credit is a tax-free quarterly payment that helps individuals and families with low and modest incomes offset the GST or HST that they pay. https://www.canada.ca/en/revenue-agency/services/child-family-benefits/goods-services-tax-harmonized-sales-tax-gst-hst-credit.html b. The BC climate action tax credit (BCCATC) is a tax-free payment made to low-income individuals and families to help offset the carbon taxes they pay. https://www.canada.ca/en/revenue-agency/services/child-family-benefits/provincial-territorial-programs/province-british-columbia.html c. The Canada child benefit (CCB) is a tax-free monthly payment made to eligible families to help with the cost of raising children under 18 years of age. https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview.html Visit https://PrudentMoneyCoach.com/blog.html or follow me on LinkedIn, IG, FB, Twitter for more tax and money tips. Have a great November! |
AuthorCommitted to help clients to be literate about their personal financial situations, to reduce their money-related stress, and to help them achieve their financial goals. Archives
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