10 Overlooked Tax Deductions & Credits

10 Feb

In the breathless bustle of tax season, it can be easy to forget all those good deeds that have earned you credits and deductions over the course of the year. But all those deductions and credits can really add up: as with most financial concerns, it pays to plan ahead and stash all those receipts with your files. Here are 10 deductions and credits that many of us miss on tax day.

1. Charitable donations: Many of us neglect to add up the smaller, $50-200 donations we often accrue during the year. You don’t have to claim all of your deductions in a single year: according to the CRA’s website, “it may be more beneficial to carry them forward and claim them on your return for any of the next five years.”

2. First Home: If you have recently moved into a new home and neither you nor your partner have ever owned a home before, you likely qualify for a $5000 credit.

3. Medical Expenses: We often do not realize how many expenses qualify as medical. As a rule of thumb, anything a doctor specifically recommends or requires may qualify.

4. Child Activities: If you have enrolled your child in a sports team or paid for tennis lessons, you qualify for the $500 Children’s Fitness Amount.

5. Interest from Student Loans: While private loans do not qualify, student loan interest accrued from a government loan is generally deductible. Plan carefully, though, since the CRA notes that when a student loan is “combined with another kind of loan” it becomes ineligible.

6. Disability: If you have a “severe and prolonged impairment in physical or mental functions” as defined by the CRA, you can claim this large, $7000 credit.

7. Caregiver: We often only think of children as dependants, but if you have an adult dependant living in your household, you can qualify for the Caregiver Amount.

8. Family Caregiver: Introduced in 2012, the Family Caregiver Amount is an additional $2000 credit that can be used in conjunction with the caregiver credits, if you have a dependent with a physical or mental impairment.

9. Public Transit: Single passes are ineligible, but if you are a frequent user of public transportation who has a long term pass, you can deduct it from your taxes. Discounted monthly student passes qualify for this as well.

10. Safety Deposit Box: If you have a safety deposit box with a bank, you can deduct the cost to maintain it.

Kick Winter To The Curb By Moving

13 Dec

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Winter isn’t for everyone, some people may love to roll around in the snow, making angels, but there are those that wish the season would just pass buy. If you live in a cold location, when winter comes, you just may think that leaving would solve the problem. Although it helps for a little while, you will eventually have to come home and deal with the season until it ends. Winter can be a cold and numbing season, but there are some things you can do to finally get out of the cold for good.

Living in countries like South America is the perfect way to beat the heat. Places like Costa Rica are warm, affordable, American or Canadian friendly, and best of all, you will never see winter again. How cool would it be to toss out old boots and winter coats for sandals and shorts for life? Think of all the money you would be able to save by living in a warmer spot. You will have lower energy bills, and you can save money on expensive winter items like a snow blower, winter shoes and clothes, your practically saving five thousand dollars on those expenses. Move to a warm and sunny place, save money and kick winter to the curb.

 

Understanding the Risks Involved with Leveraged Investments

3 Sep

Almost all successful entrepreneurs will say that keeping your personal liabilities to a minimum is key to leading a successful financial life. What they don’t say however is that taking on loans on a corporate scale can be very beneficial, especially when you’re talking about leveraged loans. With this system, corporations and large groups can afford to invest in larger financial instruments, leading to higher yields.

A leveraged investment is one where borrowings are diverted towards an investment. Thus, a person can take out a bank loan and use the money to invest in stocks. This can be a quick way towards getting higher returns sooner rather than later. This sounds too good to be true, and sure enough it’s not always a guarantee that your investments will turn to gold. This is why most banks discourage this practice.

The risk involved in this practice is greater, not only for the money you used for your investment, but also with regards to the collateral that’s tied up to the loan. The value you of your investment can also fluctuate over time, especially if you put it into the stock market. Here, stock prices can go up or down with little warning. In contrast, your loan’s interest rate stays the same.

The whole system sounds a bit scary, and it should be considering the amount that you put in. Still, it can be very profitable provided you research well before taking out your loan.